Okay,
Right now you are facing two very distinct problems.
1. The lack of one wall to even the reflections out.
2. The lack of space to have you rears
A lot of pretty sound advice ( sound? get it?

) has been given here and I would think you could do any and all of it. IF you insist on running with the 7.1 setup then you are going to have to "bury" your speakers. This is basically getting a smallish set of speakers and placing them behind your couch, which will have to come out the width of the speakers. They should wash up the wall. This might be the best you can do, unless you opt for a 45 degree angled shelf to bounce the sound off. Even then, its going to be a very touchy tuning to get the volumes just right. Since the rears are usually for ambient and the start of certain effects or end, then the tonal quality can suffer a little bit. To some this will be alright. To others it will sound too muffled. Its a personal choice.
The lack of the wall will be a problem but it can be solved with a little tuning as well. Your side speakers will need to have a mobile stand for the side that has no wall. You might also want to use a heavy base in case guests are over. To tune this, you may need to adjust the distance from that speaker to the center of the room. You wont have to vary it much, but it should be just enough to compensate for the lack of reflection. Another thing you can do is to put a large rug, wall hanging or sound absorbant material on the wall facing the free roaming speaker. This will balance out the sound by absorbing a certain amount of it and simulate a space like the one on the opposite side of the room. It may sound a tiny bit hollow, you cant get it perfect. But you can at least balance out the reflective surfaces so that your stereo sounds its best. Leave yourself wire to go back to 5.1 if you feel like it and try variations on your setup. You will most likely return to 5.1, but its worth a try.
Another thing you can try is Echo shots. If you are really interested I can tell you how to do them, but I have never been very satisfied with the method.
SJ