[tonyvdb]

The above comments are correct. It is best to give your rear row of seating about 3' of space behind this also allows for the people sitting there to hear the sounds coming from the rear surround channels. If your front row of seating is 12' or less from the screen going as large as 132" will cause eye strain you want to be able to see the entire screen in your field of vision without having to turn your head.
As was already mentioned placing the front speakers in the front corners of the room will cause issues with the imaging and is best avoided at all costs. You should have them in at least 3' from the side walls.

 

[tonyvdb]

The persons sitting against the wall in the seats will loose some the the information that is being sent to the surround speaker on that wall as it would be shooting over there head if thats where you have the speakers placed. You should have a little bit of space between the wall and the seats if possible but as we all know it all about compromise and you can only work with in the space you have..

 

[tonyvdb]

85" diagonal is good but I bet you could go a bit larger 96" would probably be a better compromise for both the front row and rear seating.