After some period of research, the SkyShed style design was selected. This is a roll-off roof type, where the roof component slides via rollers onto an adjacent frame to allow view of the sky. The information gathered showed this to be the most cost effective design.
A dome-style observatory was also considered, however local home owner assocation rules may not have allowed such construction. A SkyShed looks and can be decorated much like a regular tool shed, and was easier to seek approval for.
Once the overall design was chosen, the next step was to ensure proper orientation and location on the property. The observatory is not located in an incorporated city, so relaxed county rules were the only considerations.
In this situation a 10' x 12' shed for maximum of 120 square feet was allowed. This size was also appropriate for the amount of distance and room required to comply with other local regulations.