Help Me, errr.. Thursday [Re-post]

[Edit: I'm re-posting this because I missed last week's Help Me Wednesday! The wallpaper has come in, so it's getting down to W-Day (Wallpaper Day). I have to decide what to do soon!]

I missed "Help Me Wednesday" at white house, black shutters, but I need help, and it's Thursday... so Help Me Thursday, it is!

See this refrigerator nook? If you look closely just to the right of the fridge, you can see the wallpaper that's in the nook right now - pink & blue stripes. That wallpaper was what was in the kitchen when we moved in. We were able to strip it from everywhere but the walls in the nook, due to what the walls are made of - don't ask - I'd venture to say that they're part cardboard. So, since we can't strip the wallpaper and paint, we decided to do a fun wallpaper on top of the current paper.

Then there's this area in our kitchen. The walls were in such bad shape, that rather than try to fix them, it was easier to put up this wood. Which is fine on the left side, because we plan to put the same wallpaper there to tie everything in. But the area over the door is a different story. The whole thing just looks awkward. There's about a 1/4" edge of the wood that is higher than the wall surface right where the door starts (where the yellow paint meets the wood). The wood sits on TOP of the wall, so it's an uneven edge. If we paint it all yellow, there will be a lip from the wood to the wall. If we put wallpaper on the wood, we end up with an unfinished edge.

This is where you guys come in. Do we wallpaper the wood above the door? Do we paint it yellow? Do we wallpaper the entire wall(including where the paint is)? Do you have another suggestion?

There's no way to finish it out with trim without making it look extremely awkward.

This is the wallpaper we I have picked out:

I know it's hard to see, so I'll try to explain it. The paper background is white, which you can see. The sunburst pattern is a shimmery silver/champagne color. So, it looks different depending on whether or not the light is shining on it. I initially picked out a damask print in the same colors, but decided to go with the sunbursts since our kitchen has more southwestern colors.

So, tell me, what in the world do you do with this awkward space above the door?

PS. No pressure, I'm just counting on you guys 100%. :-)