What to do with a Transom Window?

I received a call from a couple who have a transom window and really wanted to put something in that will improve the look of the space. It is nice in that it adds more light to the space and adding a stained glass window will really add a nice visual element to it.
  

The last picture shows how odd it is with the molding above the door rising above the lower sheetrock of the transom window.  We discussed filling the whole area instead of just the window(glass) portion which will be more satisfying.

I came up with a few designs after discussing with them what they like and wanted and they chose the middle one.  The second picture shows the color scheme.

This is going to be a fun one to create!  I will be showing the progress.