We are spending 5 days in Barcelona and then would like to drive down the coast and make our way to Madrid (through Valencia and any cool coastal towns). Any ideas on a itinerary? We will fly into Barcelona and out of Madrid. Trip is in July.

Much of the coast from Barcelona south to Valencia is rather boring. You'll be better off heading inland or taking the train to Valencia and then to Madrid.

How much time will you have for going from Barcelona to Madrid?
There are quite a few sights, but not all of them exactly along the main coastal motorway.
The easiest to access would be the delta of the river Ebro and the historic towns of Peniscola or Tortosa.
The more time you have, the more sights or detours would be possible, e.g. to the Templar castles in the hinterland or the historic sites of the Civil War in the Ebro region, upstream from Tortosa.

I would spend 3 days in Barcelona and take the train to San Sebastian for 5 nights, then I would head back to Madrid. Barcelona to Valencia is a boring drive and July will be terribly hot. Just my opinion.

Thanks all...I think we are now leaning towards heading to Madrid after Barcelona via AVE and then day trips to Segovia and Toledo.

Now that sounds like a good trip.