I have a Martin D-28 that I love, and I found it used for about $1200. I would look at Craigslist. Also, if I was to buy another, it would probably be a Taylor as the ones I've played have all been sweet. For that kind of money, you should be able to get a really nice guitar. Keep looking and don't settle for something unless you really love it.
"The only funeral you should ever try to interrupt is your own, and that should be a full-time job." -Kinky Friedman