Suggestions for audiophile grade receiver for Home theater setup

@raj123  I have a dual system and fully support the best setup being a stereo pre combined with an AV processor.  Regarding AVR's, many good ones but I would look to Mc, Anthem or Integra for a sure thing.  In my case I am using a stereo pair of Rel's for music and a JL Audio sub setup for LFE.  This eliminates a lot of the compromise for the sub setup differences between 2-ch and HT for a pre/AVR system.

Not looking for a debate but if you really want the best performance from HT you should consider adding a timbre matched center.  I have run systems with phantom centers and they are certainly adequate for dialog but not optimum for HT imaging/effects.  Like so many things in this hobby it's how crazy you want to be.

Best of luck...

Indeed a good, well-matching centre channel speaker is highly recommended for movie watching. I find with surround music though that it often is better to have a saved setup that splits the centre channel between the front left and rights. This is because the large soundstage presence that one knows from high-quality stereo listening can be destroyed when there is a very short Jim Morrison or John Lennon singing from the horizontal centre channel speaker. Smart ATMOS mixers keep the vocals in the left right channels. Examples of doing it right include Prince Purple Rain and Pink Floyd Animals.

After a couple of iterations including multiple Audyssey runs and playing with NADs gain level, I have been able to put the system together. To summarize

4.1 system
Denon X3800H, powering 2 surrounds Kef Meta 1
L/R preouts to NAD M32, driving Focal Sopra2 pair
Sub: HSU ULS15
Room: 14x20x9 ft
Audyssey settings:
Distance and Levels: Front L (16.8 ft, -1.0 db), R (16.8 ft, -1.5 db), Sub (11.4 ft, -3.0db), SL (6.7 ft, +0.5 db), SR (5.1 ft, -2.5 db)
MultiEQ XT32: On, Dynamic EQ: On, Dynamic Volume: On

I am very happy with the performance for both HT and Music. Sound quality is amazing. Sub is very strong, it can shake and produce rumblings with case

I am open to ideas about improving the performance further. At the same time, want to be clear whether those improvements would be marginal or significant. Here's a few ideas in my mind

Room treatment
Getting a center channel for <$500, eg Martin Logan Motion 4
Adding another sub: want to try something new with similar dimensions like the current HSU (19" cube), and weight ~85 lbs. Like SVS PB 3000 (5000 series or Ultra would be too huge and heavy)

Congratulations. It is great when a system comes together. Enjoy. 

Congratulations on your new "dual action system.  I went through a similar process several years ago.  My current setup:

• Marantz SR8015 AV processor
• B&K EX-442 Sonata 2-channel amp for the mains
• Adcom GFA6000 5-channel for the center/surrounds
• Parasound P5 preamp w/HT bypass for 2.2 channel listening (though this preamp will also pass a signal even when powered off, and in fact sounds better that way...); it also manages two subwoofers, which is nice. 
• Rythmik F12G sub up front w/the mains, a small M&K K9 sub in a back corner to fill in bass response
• a pair of classic Energy CR-3 surrounds
• Elac UC5 3-way center channel (that marries really nice with either of the mains that I run)
• Ohm Walsh Tall 2000s are my current fronts, Magnepan MMGs also get put in once in a while and were prior to the Ohms.

Audyssey run through the Marantz does a decent job, but I always end up tweaking my main speaker levels (through the app - it's worth it, as you can do much more tweaking than by just using the receiver), I typically bump up the sub(s) by 2-3 dB, and the big thing is my subwoofer distance setting.  I got this tip from the an A'goner who I bought my Rythmik sub from:  he suggested adding several feet to the Audyssey-measured subwoofer distance.  It sits about 14.2 feet in front of me, and I have consistently found over many different Audyssey measurements (and tweaks) that a final distance of about 21.3 feet really tightens up the bass and integrates it much better with the mains than what Audyssey measures.  This is with my mains and sub aligned pretty evenly across the front wall with the television in the middle; the sub is just inboard of the front left speaker. I'm not sure where your sub is located, but I note that you state the distance is roughly five feet closer than your mains.  If your sub is aligned with your mains, play around with a greater distance, perhaps something around 24'.  If not aligned and your sub is fit somewhere else, then obviously disregard.  It appears you're looking at a decent center channel, however it's two-way.  I did a LOT of research before getting the Elac (I didn't previously run a center channel) and the one recurring piece of advice was to go with a three-way for best integration.  It really worked out well for me.  Food for thought.    At any rate, congrats again and happy listening.