It looks very functional so far.

One thing that you could consider to give a bit of separation is this. Its a paradigm shift but try it and see what you think:

Mirror the entire kitchen as is, (except perhaps for the pullout pantry). Create an enclosure around the fridge so that it acts as a large "column" at that corner. There is still a lot of openess, but it gets the sink and its attendant clutter away from the dining area. (Click to enlarge images)

I did that here:

But I don't have a great picture finished:

Wow - your space really reminds me of mine, dimension wise anyways. I went a totally non-traditional route, which is definitely not for everyone, but I thought I'd throw this out there anyways...food for thought and all.

My house is pretty small, storage space is at a premium, so I wanted the biggest kitchen I could get, especially since some of my happiest times are when the fiance and I are cooking together, so we wanted a kitchen for two cooks. We're also really casual people so a formal dining room would have gotten used maybe twice a year. Anyways, long story short, here's my layout. It was tweaked (removed tall pantry pullout beside the fridge because the corner would have been way too tight in there) and a couple other minor changes.

I think the space up until the wall where the powder room and walk-in pantry is is about the same size as yours.

donka, my original thought was to do something similar, but my living room is really small too, and I decided to see if I could up with a plan that gives some seperation...
I love your layout with the island.

Is it possible to bring up a pony wall on the back side of your sink that could go up to bar height, give you a place to "hide" the dishes and hide your plumbing and electrical? You can put a piece of your countertop on it and take it a few inches both directions and make it large enough for a breakfast or coffee bar.

We have something similar between our current kitchen and combo living room/dining room and it does come in handy right now hiding the dishes!

I also like to suggest that you spend some time researching which of the microhoods is the best for you. We thought about this option for awhile and I was dismayed at how lousy the reviews were for this type of appliance. I know lots of people like their spacemakers but I am so thrilled to get rid of ours that well.... ;) The only microhood that I found that I liked with consistently good reviews was not cheap.. made by Bosch. Once my husband saw how much that was, we changed our plans and are going with a regular chimney hood.

Hi, Annie. How about comfortable upholstered banquette seating wrapping around that corner? Making one's way around a table and chairs in a snug space and cleaning under them are fairly aggravating. Since a banquette table overhangs the seat, it takes up less space, leaving more room on the the chair sides. It also seats more people when needed. It provides a great deal of storage. It declutters the view and cleanup by cutting down on all the furniture legs. And no least, it always looks cozy but done nicely can also be sumptuous and elegant.

is the 3' on the lower left a doorway to somewhere?

steph, yes -it's a stairwell. (it's actually 4 feet.)

Rosie, I've been thinking about a banquette. Do you think it would be too casual for the only eating space?

earthpal, I've drawn it with the pony wall and without - still trying to figure out if I have space though since every ince seems to count. How thick would it have to be?

A few options you could consider. This might hurt, but I can't tell a door from a window from a doorway in the drawing - so this has some guesses.

So, running the cabinets across the back wall with a seating peninsula, or a partial storage peninsula. Or with a small banquette tucked into the corner by the wider opening. Banquette can have small table or small table with two chairs.

Or two, narrow tall pantries on the right-hand wall to meet up with the banquette - gives you two 30" oabinets and an appliance garagey thing in the corner. with a wine rack over it. I'd just let the last foot of base cabinet in the corner die off - or make a secret place for dolls or something like that.

If doing the banquette version of seating, the "peninsula" can become either slightly narrower fixed storage or a rolling cart or a loose island on legs.

{{!gwi}}

Good luck whatever you choose!

Here is what I was talking about. Try superimposing this mirror image on the plan you have, in exactly the same location. (Except the pantry, scoot the fridge over to the corner and create an enclosure around it.) It has openess but also creates a separation since its the only eating area, and gets the sink away from the table:

{{!gwi}}

Here is sort of a picture from the interior of the kitchen where the fridge was put in a column in the corner. Just try it and see. (Click to enlarge, ignore the other captions)

I'm no good with design, but I'd try to incorporate the dining area into the kitchen as donka suggested or make the dining area a banquette and use the pony wall to "hide" the sink. Google "banquette" and look at lots and lots of pictures to find what you like. They can be as casual or as formal as you want.