Two exciting things happening in Theravada Buddhism at the moment are:
The ordination of bhikkhunis (nuns) in the west, and the backlash from the conservative [male] traditionalists back in Thailand... and in some western monasteries too. Big debate, big excitement, a real development/evolution/schism in Western Buddhism. There's a huge thread here on Dhammawheel about it.
And the other really interesting thing happening in the past few years is also a western phenomena.
I'm not sure what to call it. Based around western meditators taking Buddhism and
...stripping away dogma and unhelpful taboos, people sharing with each other in ways that are down-to-earth, helpful, and pragmatic, and the vision that it can be done, rather than a dharma world that is mysterious, artificially heirarchical, dogmatic, and secretive. http://www.interactivebuddha.com/
* pragmatism over dogmatism: what works is key, with works generally meaning the stages of insight, the stages of enlightenment, jhanas, freedom from suffering in what ways are possible, etc.
* diligent practice over blind faith: this place is about doing it and understanding for yourself rather than believing someone else and not testing those beliefs out
* openness regarding what the techniques may lead to and how these contrast or align with the traditional models
* personal responsibility: you take responsibility for the choices you make and what you say and claim
* a lack of taboos surrounding talking about attainments
* the assumption that the various aspects of meditative development can be mastered in this life
* the spirit of mutual, supportive adventurers on the path rather than rigid student-teacher relationships and the notion that the collective wisdom of a group of strong practitioners at various stages and from various traditions and backgrounds is often better than following one guru-type.
Just a caution, some people (well, okay, a lot of people) think Dan Ingram is a bit of a loon. Which may be true. But many other people are also involved and doing the same stuff as him and getting results, so he can't be all wrong.
Also related to Dhamma Overground and Daniel Ingram's project, is Chicago's Cheeta House and the Dark Night Project. There's a woman there Willougbhy Britton, who is doing some interesting work on the more uncomfortable stages of insight... http://www.buddhistgeeks.com/2011/09/bg-231-the-dark-side-of-dharma/
Willougbhy Britton studies neuroscience at Brown University, which has an awesome faculty "a branch of the Brown University Contemplative Studies Initiative in the Warren Alpert Medical School that focuses on the clinical aspects and applications of contemplative practices."http://www.brown.edu/Faculty/Contemplative_Studies_Initiative/
Those are the areas that spring to mind when considering what might be interesting to write a masters thesis on.
Oh, one more thing, if you like matters relating to minorities and racial issues, is looking into the reasons for the lack of Black and Hispanic faces in western dhamma communities and practise groups. It tends to be disproportionately white middle-class folk.
Best wishes, and do drop back in when it's (A) decided, and (B) finished. Show us what you wrote!