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first of all... what are you monitoring on? the fact that you didn't mention it leads me to believe that you should spend that $1k there.
got monitors? good! what about room treatment? $1k would be a great place to start for some lumber & 703 to make some absorptive panels, gobos, & bass traps.
got a treated room? good! how about a pair of ksm44's? used they should be somewhere around $1k (maybe a touch more), and they sound great on just about anything.
stuff that makes a sonic difference goes in this order: 1) player & instrument 2) room 3) mic 4) pre 5) other gear (compressors, converters, etc. etc.). start at the top and work your way down to the bottom.
--jon
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