For the living room - if having more visitors, makes the couch an easy sleeping option. If Tom's willing to give up his couch sleeping thing. DIY: Couch made from an old door. Tutorial, info & lots of pics explaining how to build this couch.
Here's an innovative solution from Danish textile designer/potter Antero Kjaer: a couch/bed made with two twin mattresses, hooks, and foam. How To.Make a Couch, Bed, and Guest Room Fit In a Small Space