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You'd need to have some flooring and ceiling (bare joists never really seem appealing), so there goes even the 6'10" you have now. There's no way you'd be approved.
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Perhaps the OP doesn't mind exposed joists or minds them less than no theater room. Assuming 2 x 8 joists the OP could have 3 1/2" sound insulation under sheetrock and partially exposed beams. At least according to the code escanlon copied.
The bathroom is another matter. Under that code the ceiling isn't an issue - the first thing to find out is the floor drain connected to the sewer or drain directly to the yard or a dry well.