If you are patient, and willing to dig around, you can find good deals on great glass. Last year I managed to pick up a late model, pre-swarovision version of the 8.5x42mm EL's for only $900. Probably one of the best purchases of my hunting career to date.
Sell the binos you have and start watching the classifieds or even post a WTB ad outlining what you want and what your budget is. You might be surprised at some of the offers you get.
Doug is great to deal with and I am sure he can put you into an upgrade over what you have for a reasonable price.
Also, check out a 10x42 model from Tract. It's in the budget you mention and the folks here that have them are all generally very pleased.
