Camera advice

Lyn, I have a Canon 40D (new model is the 50D)which was my second dig camera. The first was a Panasonic / Lumix FZ-50. In addition to the initial purchase price considerations, don't forget to factor in whether you can use the lens (or lenses) that you purchase with your first DSLR on any subsequent camera body that you purchase.
.
It's probably better to spend a little more on the purchase of a lens.
.
Consider the Olympus cameras. Tark is the expert on Olympus products and he may offer some help. Have a look at some of the images that he has posted. They are taken with an Olympus camera and they are outstanding, equal to any posted on this forum.
.
Good luck.
.
Cheers,
.
George

In my usual dim witted way I've only just noticed that there are other BiBY forums to which I've not yet contributed and this is one of them; so at this late stage I hope you are still making up your mind as to what camera you should update to.

As a retired professional photographer I make no secret of the fact that I am heavily biased in favour of the new Olympus 4/3rds format E-series cameras for the following reasons.

1. Olympus E-series cameras have an astounding 5EV image stabiliser built into the camera body that allows you to handhold a 600mm equivalent lens in poor light at shutter speeds as low as 1/60 second and still get pin sharp pictures. Oly digital lenses are not only of superior quality within any comparative price range, but are almost half the weight and price of their competitors because you are not paying for the expensive Image Stabiliser component each time you buy another lens.
.
2. The revolutionary 4/3rds format was initially developed by Olympus in association with Kodak. 4/3rds lenses deliver light rays to the camera's sensor in parallel rays instead of convergent rays as do conventional lenses. This results in superior image quality, richer natural colour and edge to edge sharpness across the entire image, not just the centre of it. 4/3rds lenses that handle light this way are called, telecentric. Another nice thing about Olympus lenses is that they come with a high quality lenshood included the price. With most other makes a lens hood is an optional extra that can cost upwards of around $80.00 each time you add another lens to your bag.
.
There are many other reasons why I consider Olympus E-series cameras as particularly suited to birding but that's enough for now. If you are interested in investigating the Olympus E-series option further, then I am always ready to help. I bought my current E-520 this year that came as a 2 lens kit comprising a wide angle zoom (28mm-84mm equivalent) plus a mid range zoom (80mm-300mm equivalent) to which I added my (140-600mm equivalent) birding lens, with which all the images I've posted to the Best Pictures forum were taken with. That lens costs around $800.00. The E-520 two lens kit can be bought for less than $1000.00.
.
As you know from your C-760, Olympus lenses even at entry level are second to none, and in the digital SLR range they are superb. There is no such thing as a bad or mediocre Olympus glass.
.
I'm not made of money Lyn, I can assure you. I just bought the 2 lens kit first for under a grand. The longer of those 2 lenses has a maximum reach of 300mm (equivalent to the 35mm film format)and that lens will capture any bird up to about 10 metres. By the time I had learnt to handle the camera I had saved the extra $800.00 for the 140mm-600mm (35mm equivalent).