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Well, from reading what you've got and what situation you're in, I can only give you some advice that works for me.
I would just say screw the tv and just play on your moniter. I have a 19 hp lcd monitor that I capture and just play straight off of. That way for you, you'll have sound and the whole nine yards in terms of quality.
I suggest you use v dub to capture and play on. If you think your monitor is just too small and you can't tolerate the size. Just give it a try first. I said the same thing with my 19 inch and I found it not a problem at all.
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