Cant get my Dynaudio 1.8" to perform optimally in my listening room, or many other speakers for that matter.

I am feelin rather low tonight. I am trying to get my Dynaudio 1.8's to perform optimally in my very difficult living room which is bright by construction (Plaster, Concrete and Cinder-Block). To make matters worse, the walls are also reflective with posters in glass frames. I have lots of rugs scattered around this room, which is also our living room. The problem is the room is only 12 feet wide. I am using Naim CD5, highcap, Spectral pre/amp and linn TT. I have gotten some great suggestions on this forum, but all ideas seem sub-optimal.

The trade-off boils down to Do, I place my speakers to yield the most natural tonal balance, which places them about 40" from the side walls with only 54" between the speakers, With this distance between the speakers, all the sounds are so compressed, that I cant follow the music. If I place them wide apart, then I could more easily follow the music and I am not straining to figure out what is going on, but side wall reflections create BIG problems in tonal balance. The music is more FUN and Involving when I dont have to struggle to figure out what is going on, but it is far less accurate. This has happen with almost every speaker in my room, I have tried. Do I give up?