I'd definitely put some kind of stone on the walls, all the way to the ceiling. I think the gas fireplace that you have is really cute, but might look at a stone slab on the floor instead of the mat that is there now. I'd take stone inside of that alcove as well, whether matching or contrasting. You can still hang art above, on top of the stone. It would really make the room!

I agree with victoriabunglowranch, scrub it and repaint in one of the colours of the piece, I'd personally head towards dark and moody colours for walls, with crisp white ceilings, how about wrapping the chimney in smokey mirror in same shade that you paint the wall, I agree floor is very busy, would like to see a large rug here to keep the focus on the fireplace and I'd keep the "mantle area" free from objects, the fire place is enough, art work on side walls and floral pieces on coffee tables or buffets, I'd also choose luxe furniture and fabrics in one of the lighter shades shown in the fireplace, perhaps with a slight leaning towards art deco in some pieces and then spice up with accent cushions, art, lamps and lighting. Art Deco can carry contemporary pieces too, be brave here this could be a very special room with it's own personality and with care it will still link to the other areas of the house.

I really like the second one, but if you really like the wood panels then suit up for creativity - you can easily have the best of both worlds. Clear your wall at home and put the wooden panels there, you can then install the mantel on the panels just like in the second picture. Hope I helped :) Best wishes xoxo

If you want the look of the fireplace you posted but are scared that the dark grey will flood your room, you could paint just the one panel/side wall with the grey, paint the fireplace frame white, and then paint the rest of the room a more light neutral colour. It will also create a more contemporary look and create more focus to your fireplace. Alternatively you may feel more safe to paint the fireplace frame a neutral colour to match the neutral walls. When you are ready to replace the fireplace, I would suggest a bio ethanol burner as a simple solution with minimal DIY work and an option of different styles. Good luck, and please feel free to visit our profile if you're in need of more fireplace inspiration!