Either what you said, or puting a wardrobe that will hide the entertainment center when not in use in the corner between the fireplace and the bay window. From what I see, the couch cannot face any other way.

Maria in Chios, Greece

...another thought. The mantel is a bit too high and I suspect the corner might be too tight for a wardrobe, so I would suggest what you can see on the link below

Here is a link that might be useful: a lower mantel with shelves on both sides

What are the issues with where the TV is now?

Before you mount the TV over the fireplace, make sure that you have a comfortable viewing angle from the sectional. If the TV is too high or the sofa isn't in a good place, you may have to tilt your head up to watch TV--if you are watching a long movie, that can get tiring.

I kind of like the TV where it is now. You have a "focal wall" instead of a focal point, so to speak. Depending on the amount of room in that corner, I'd look for a corner TV stand that would make the best use of the space.

Right now, with the TV in the corner, everyone sitting on the sectional has a decent view of the screen. If you keep the sectional where it is and mount the TV over the fireplace, at least half of the sectional will be at right angles to the screen and people sitting there would have to turn their heads awkwardly to see it. Not an issue if you only ever have two people watching TV at a time. More of an issue if several people use that room to watch TV on a daily basis.

"What are the issues with where the TV is now? "

Same thought I had....

That corner works well with all the seats of the sectional.

This is the previous owner's stuff you see in the pictures. My TV is 52", so it will not fit in a corner the way the TV in the picture is. To give you some perspective, I believe that TV is about 45". I may be able to mount the TV above the fireplace without lowering the mantle, but it will be a tight fit. However I think it will make the room look clustered because that wall will be packed floor to ceiling.

I like mvastian's suggestion on pinterest. It's very nice looking. :) Wonder how much it will cost to reno the room to look like that.

Citress, don't completely rule out putting the TV in that corner, if having it there would make the room work for you. My brother had a 48" TV on a corner stand. He upgraded it recently (in time for the Super Bowl) to a 60" screen. He had to pull the corner stand out a bit from the corner, but it still looks fine and the TV fits easily. He uses the speakers to hide the gaps between the stand and the walls, but you could put plants there or just leave it alone. If you are going to do a built-in anyway, you could have a corner shelving unit built that would hold the TV and assorted electronics.

However, if you really just don't want the TV in the corner, you can just ignore me.

Depending on the size of the room and your furniture, you may be able to place the TV on the long wall where the sofa is and float the furniture - backs facing the bay window but leaving room to walk behind them.

You might want to post this on the Home Decorating forum. There are lots of good furniture arrangers over there. And could you post a photo of your furniture so we can see what you are working with?

Citress, if you plan to use your fireplace, it might not be good for the TV to be above it. I like the corner idea as well.

We had ours above mantle we couldnt stand it any longer your neck ached,So we went from a 42 to 70"tv,I had to reaarange my room totally but like it now.
My suggestion would be swing the sectional around facing big wall,put tv on a stand.Would that work?