October is the wettest month for Sri Lanka so maybe not the best time to travel. That said we were there in Feb 2011 and were literally knee deep in flood water in what was supposedly the driest month. The locals told us that the seasons had changed radically in recent years. The east and west coast also have different monsoons.

here is a link to my trip report;
http://www.fodors.com/community/asia/sri-lanka-tea-floods-cricket-and-curry.cfm

thursdaysd, femi and leightravelclub also have posted comprehensive report.

Is there enough to do in 7-8 days absolutely! however, although it is a small country travelling times can be deceptively long. A car with driver guide would be essential IMO.

You are right to miss out Columbo but some of the beaches are very nice. The tea country is fantastic as is the cultural triangle around Dambulla Sirigiya etc.

Hopefully mohammed, who lives in SL will see this post as he is a mine of good info.

There is enough to keep you busy and interested in Sri Lanka for weeks. I expect the grumbling on LP is related to the increase in tourism since the war is over. We were there while the war was still going on. My trip report is older than the ones crellston cites, but may still be useful in choosing upper-range accommodations and in cultural sites. Photos are here:
www.marlandc.com/SriLanka/index.htm and there is a link on the first page to my trip report.

Don't underestimate the number of sights Sri Lanka has to offer just because it is a small country. You'll find plenty to do in 7 or 8 days. I have been since after the war was over and never encountered any of the typical tourist rip offs that so many travellers loath. I liked the Cultural Triangle and the Hill country. I wouldn't hesitate going back to Sri Lanka.

The Maldives are hands down the BEST beaches I have seen. One of my favourite travel experiences in this part of the world is taking a float plane over the atolls. The Maldives are an expensive destination. Male is only an hour by air from Colombo.

Yes, the Maldives are pricey. I have seen pretty amazing beaches in the caribbean (Anguilla), but the Maldives looks gorgeous. I just get bored....

Would you recommend 4-5 days Sri Lanka then 3 maldives or just spend the whole time in Sri Lanka?
As for 7-8 days in Sri Lanka, how would you divide the time between Hill Country & Kandy? Where else to go?

With a mere 7-8 days in Sri Lanka, I'd divide my time between the cultural triangle and the hill country, with perhaps a stop in Kandy. You could do this:

Arrival in Columbo and go immediately to Dambulla (Cultural Triangle), spend 3 nights there which will allow you to see the three closest highlights of the cultural triangle: the Dambulla Cave Temples, Pollonnaruwa, and Sigiriya. Then on to Kandy for one or two nights, followed by three nights in the hill country.

Where to go and what to do depend a lot on your interests. Read some of the trip reports. For instance, we were especially interested in Buddhist Heritage sites, Femi was interested in wildlife and we had very different trips. You'll have to choose your focus, as there is much to see and do there.

Since you mentioned northern India and Bhutan, let me offer another option: Sikkim. Once an independent kingdom, it is now part of India. We had a fabulous time there in a remarkably untouristed spot where we could explore Tibetan Buddhist monasteries and see the Himalayas. photos at www.marlandc.com/Sikkim/index.htm again, there is a link to my trip report on the photo page.

tansmets,

we are going to Sri Lanka for 14 days, and had difficulty fitting everything we want to do into our itinerary.

we are doing more or less what Kathie says for the first part of the trip - 3 nights in Dambulla, Kandy for one or two nights, followed by three nights in the hill country. After that we go to the south for 4 nights before going to Colombo at the end of our trip, hopefully to see England retain the T20 [cricket] championship!

I don't think that you will find it difficult to fill your time.