Hi mlgb, I've been looking at StarPeru for flights from Lima-Cusco. They seem to have the best fare at $300RT for 2 adults. I think we are going to keep our original itinerary of staying in Lima first, then going to Cusco.

Is 5 hours good enough time to cover Machu Pichu? I am planning to take the
8:50 train from Ollanta and would reach MP at 10:30 or so and would like
to take the 6 PM train back to Ollanta. Assuming the bus ride from the train station
to MP is about an hour that would leave me with 4 or 5 hours. Will this time be sufficient?

Yes it's enough time. Hopefully though it will not be raining which it is apt to do in the afternoon (It started about 1:30 when I was there). Hence another reason to try to take the early train, especially if you manage to stay in Ollanta.

If you can't manage to take the early train it might be better to overnight in Aguas Calientes and then have the morning in MP.