Hi, Paul.
Don't give up on your layout plans. Every new modeler wants everything in the world on his layout but soon learns the real meaning of compromise!
You said your room is 10x10. Will Annand built his layout in a 10x10 room. Take a look at what he has done:
http://www.muskokacomputes.com/CVR-Home.html
Impressive, yes? So don't get caught up in thinking that you can't do something. And don't fall into the trap that a layout has to be a certain size or done a certain way. Creativity is the driving force behind many a layout!
Now put an 18" wide shelf around the room. You now have
twice as much layout (about 50 sq. ft.), but the center of the room is open and can be easily used. Raise the shelf to give good clearance for the day bed and you've got yourself a great layout room AND a spare bedroom! You'll need lift out sections for the entry and closet doors, unless you want to duck under the layout to get to the middle.
UP2CSX also suggested using turn-arounds on the ends of an "L" shaped layout. That's also a good idea. The turn-arounds can be as narrow as 24" which allows plenty of space for other activities in the room.
So there's several ways of getting yourself the layout that you want. Don't be afraid to experiment with different ideas!
Hope this helps.
Darrell, quiet...for now