I'm not sure if I am completely understand your dilemma so forgive me if what I write doesn't make sense, What is the reason for the short, lighter curtain? Is it a sheer for privacy? If you need privacy and your sheers are returnable you might consider replacing them with blinds. Blinds are considered a more modern look than sheers and would work better with your rug and furniture. If your sill is interfering with your longer panels you should be able to find rods that extend out farther than the rods you have now. If you have the room, I would also suggest that you lengthen your rod so when your long curtains are pulled back you see the window trim. You may want to add some extra panels for fullness. The designer trick to to hang your curtains high and wide. This blog has some good suggestions about curtains: http://www.younghouselove.com/2009/06/email-answer-its-curtains-for-you/

I'm wondering how you would hang the panels in such a situation. I would rather treat that wall as a feature wall and paint it a slightly contrasting color. I think paint would look more natural than non-functioning drapery panels. Or may use wallpaper or a wall cloth. I used to upholster walls in the 1970s, but I'm not recommending that.

Well will the curtains be custom or readymade? That might help you decide. While some like a rod under the ceiling, I'm not a fan of seeing all that wall space between the top of the window and the rod. So, there is no correct answer, it's a matter of preference or necessity. It should be at least 4" above the window/molding if possible and can go all the way up to the ceiling, or anywhere in between.

Hang the drapery panels from a rod that is mounted to the ceiling. This one below from IKEA