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Here's another vote for using the larger room. You can get a video camera and small monitor for not much money, and that will help with communications. And as others said, running microphone cables 40 feet is not a problem. The only downside I see is the added expense and effort to treat the larger space. You mentioned "mobile traps" which implies traps on stands. So you could move them to the large room while recording, and bring them back into the control room to mix.
--Ethan
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