First I took a 5" base molding, that will be mounted upside down, and attached 45 degree backer blocks to it for attaching the crown molding. I cut an extra 45 off the edge of the blocks that will form a "V" channel for the rope lighting once the crown molding is attached in place.
Then I mounted all these "backer boards" completely around the room, the top edge is 5" down from the ceiling.
Here's a close up, and also the first couple pieces of crown molding are in place.
Finished product!
Its hard to get a good picture, but this is how it looks at night. Pretty cool!