In need of ideas...

...but first, some background.
When we first bought our home, the room pictured below was actually the dining room. We thought it would make a better living room, so we did just that. Here she is on the day we closed on the house, July 2000:


If this was to be the living room, I knew the wallpaper had to go. (The photos were scanned from one of my scrapbooks, so I apologize if they're not the best quality.)

Two months after moving in, while the hubs was at work, I got busy and started removing the wallpaper. (against his advice of course!) Can you imagine what I found beneath the wallpaper? The plaster on one of the walls was completely destroyed (water damage)! Of course, I wanted to cry but I'm not sure whether it was because of the wall or because I knew my husband was going to be angry. Can you say, "Lucy, you got some 'splaining to do!"

I don't have any photos of the actual "plaster disaster" but here is my husband tearing it all down:

We managed to get the wall taken care of and drywall was installed (which also angered my husband because he hates drywall.)

My sisters and I then took to painting the walls. I went with a color from Home Depot called "Simmering Cider". To be honest, it's orange. It was a shock at first especially because I was coming from an all white-walled home. We immediately loved the color anyway, albeit bold.

Over the years, so much has changed in this room...the sofas, the end tables, coffee tables, entertainment centers, area rugs, etc. I still remained true to my orange walls though. Honestly, I still love them even now. However, the one thing I do not love and have never loved in this room is that one darn paneled wall! You see, after the big "plaster disaster" there was no way my husband was going to let me remove the paneled wall, so I've had to live with it. Believe me when I tell you, I tried and tried and tried to convince him to remove this paneling, but he stood firm, knowing all too well what most likely lies behind it...more trouble.

After almost 10 years, I recently decided I would throw in the towel and paint that darn paneled wall. I never wanted to paint it before because I thought that painting it orange like the rest of the room would make the cream colored fireplace stick out like a sore thumb. The decision was then made that I would rid myself of my favorite orange walls so that I could rid myself of that darn paneling.

Off to Home Depot I went, in search of a paint chips most likely in the beige family. Several days later however, hubs was watching a home improvement show and whoever it was, said if you have paneling and want to get rid of it, do it the right way and take it down, don't paint over it. Oh how I wish I could send that person a letter of thanks because that's all it took. After 10 years of uneventful persuasion, that's all my husband needed was a few sentences from a home improvement guy to get him to waiver. He actually said we can take the paneling down!

So, after this loooooong story, I finally come to my questions. What do you think I should do? Here is the room in its present state:




Now I realize this room doesn't look very cottage-y and I love cottage style, so of course that's sort of a problem. Do you agree that painting the wall orange like the rest will be an eyesore where the fireplace is concerned? Any ideas you'd like to share or thoughts? I appreciate anything you might want to suggest. Thanks!