We have the same situation. The room only has one wall for furniture so the TV has to go on the fireplace wall. The fireplace has a raised hearth and the mantel is high, so to view the TV above the mantel would require recliners. Fortunately, since the hearth is raised and the mantel is high we can mount the TV at about 3 1/2-4 feet from the floor. The TV is a 60" so it will be easy to view while seated. We thought about building a wood box inside the fireplace as well and adding a small glass cabinet underneath the TV for the DVR and Cable box.
We have two other fireplaces so we are not worried about not being able to use one of them. However, we do want to make sure that we can put the fireplace back to its original condition for resale.
Have you completed your project? Or has anyone else installed a TV into a fireplace? Pictures would be nice. Thanks