Shame that you're forced to buy a new TV. I was checking out TV's today and the prices have dropped significantly since the last time I looked.
For 1080P (LCD) you're going to be looking at around the $2500 mark. Though you can pick up very nice 720P (LCD) for $1700 and less. The Goodguys had a very nice 1080P Sony 40" (kdl40w3100) for $2289. You could probably knock $100 off the price if paying cash, plus you get $150 cashback redemption too.
If you can handle buying online Think Audio has the Samsung LA40M81BDX (40" 1080P) for $1849.
http://www.thinkaudiovisual.com.au//...01db61c5878cac
This is a pretty old model, so I'd probably shop around and see what the jitter is like.
As for Plasma, they are highly priced for a 720p panel. The Goodguys only had one cheap one, while the others were close to (or over) $2000.