We have a large (20x30) living room that we NEVER used. It is now my studio with a long arm, sewing table, cubbies for yarn, shelves for papercrafting supplies, a huge cutting table, a round crafting table and a sitting area to do hand work and read. Oh yes, it also has a wood buring fireplace! I am in heaven.
Moral of the story is...use that master bedroom for a studio, you will never regret it!