I wouldn't bother upgrading the processor as well, I was rocking an i3 2100 before I got my 3570K and I was maxing everything out. On the games I couldn't it was my graphics card holding me back, not the processor.
For a little more than the 7850 Denther mentioned you can get an AMD 270x, which performance wise sits between a 7950 and 7970, but for just less than a 7870 would cost.
Then for power supply options, any standard ATX power supply will fit. Because of the size of the case I would recommend looking at modular power supplies, otherwise you will have a case full of cables and no airflow. Any modular power 500W power supply from Corsair, Seasonic, Silverstone, PC Power & Cooling, Antec, XFX, OCZ or Enermax will suit your needs