A few coats of mud and a little sanding later, things are starting to look alot better. Here is a closeup of the bullnosed arch. The plywood area behind the TV will eventually be tiled to match the actual mantle and hearth.
Here's how it looks currently, fully built in and part of the room now. I still need to put crown molding along the top edge. The two "rectangular bump outs" are strictly cosmetic to add some more detail when I install the crown. The tile leaning against the wall is what will go along the very bottom and also behind the TV. The bad news is the gas firebox I had framed this out to fit is out of stock now at Lowes, and it was a seasonal item. I searched online, and also contacted Lowe's corporate headquarters to try and locate one. I might not be able to get the firebox until September!