Thank you roj leather and Simon for your recommendations. I like the hanging chair and the almanda creeper on the wall. This will certainly liven up the patio.

Check with your local brick supplier. Most of them sell a thin brick that goes on just like tile (just use a tile mastic adhesive). It doesn't make near the mess as using using full size brick so it works well in existing spaces. A word of caution: The brick tiles do cost significantly more than full size bricks. Here is a pic of a similar product and some pictures from a basement we just completed that used the tile brick as a fireplace surround and an accent wall in the kitchenette.

I think a comfortable distance between the island and the counter is around 42". It seems that you have only 30" between your cook top and the counter. I might be a little too tight. The wall between the entrance and the kitchen could be 4' long instead of 6', you would then be able to move the island a foot which would give you more room between the cook top and the island. Could you switch the location of the toilet and vanity in your dad's bathroom so your enter facing a vanity instead of a toilet which is a lot nicer.

Yep painting over paneling usually doesnt look great but painted paneling is what wainscotting is so it could work. have you considered tile instead of flagstone for the fireplace? especially if you are going modern - flagstone isnt usually considered modern . as far as the kitchen - you can get an estimate for the cost to remodel the kitchen for your new home at www.remodelormove.com. Good luck!