Here is the original and new layouts

I prefer the original version, although it depends how often you think you'll dine at the table rather than the island. in our previous house which was open plan we very rarely ate at the table as the island was so much more convenient (the table was literally only a few steps away). I also wouldn't want kitchen in double height space, but I don't like double height spaces in general as they lose the human scale and don't feel good places to spend a lot of time (feel too much like a hotel lobby for my liking). I also would prefer not to walk straight into the kitchen from entrance hall when you have so much other space. I agree the TV in the living area isn't great, but you have the other lounge for serious TV watching so it's not a deal breaker. I would probably take that little partition wall with the TV on it away so that the whole space is open - then it gives you more options on furniture layout. you might want to put the living area in the double height space (although then it's right next to the other lounge) which would get the dining table closer to kitchen.

I prefer the new layout but I don’t think you have sufficient units.

Thanks a lot for your feedback and consideration. I've never had an island but I would consider eating most meals at the dining table except breakfast maybe. I don't want it to be like a formal dining area as I feel they are a waste - I want it to be used every day.
Another revision had the living area in the double height space but I felt this was too much of a high traffic junction to be able to relax here as it's the connection between all the rooms. That's why I thought the kitchen would work well as it's the room that's used the most.
I should clarify it's not true double height as it is a dormer bungalow house so will just be sloped ceiling with roof window

@Daisy England that's a worry for me too but I think it might be okay. The straight run would be 12ft and the Island is 8ft by 4ft

We thought we’d only use island for breakfast too, but the dining table was used for homework and art projects and general kid stuff so it was more hassle to clear it for meal times. I agree formal unused dining rooms are a waste of space - but can be easily used for lots of different activities. I agree with Daisy that the new layout doesn’t have enough kitchen units though. And there’s no obvious place to put a big pantry beside it to provide lots of storage. Am glad to hear it’s not a full double height room! sounds fab. I’d still keep as original though and keep the bigger area fully open plan for flexibility. You might be able to add a little round cafe table at the window seat for another informal dining/coffee area which would be lovely in that corner. I know that’s making the dining table even more redundant but think of it more like an activity table rather than just dining table. And I feel like the original kitchen location makes it more of a destination rather than a compromised kitchen which also acts as a hallway between every other area. My advice is to walk through (in your mind) every single interaction you have and see what works best - breakfast, lunch, friend over for coffee/beer, dinner party, kids homework, board games, reading a book (checking phone) while keeping an eye on dinner cooking, bbq at weekend, etc. I feel like I could relax in the original kitchen but in new kitchen I’d be looking at front door just because I could see it and I’d have to sit at island or move to a lounge for a sit down - would much prefer to sit in the window for a few minutes and look at the view! But really, only you know how you and your family live and you should do what suits you.

Alternative

@Jonathan thanks for that. We considered this layout previously but with the kitchen on the back wall, as the 3 windows on the gable end where you have it are floor to ceiling. We felt this would be the wrong orientation as it is north west, so wouldn't get much sun until the evening.