You cannot record from Dish since that's connected to your TV by Component or HDMI, not 1394. You can only record (as you already noticed), QAM cable and OTA HD by 1394 cable.
If you want to upgrade the HDD yourself, I offer a download of a disk image of a 80gb Indigita recorder which can be written to a hdd you already own, and the drive replaced. That will give you twice the space you have now. Obviously you void warranty by doing so and it will not solve your problem with recording dish.
Which cannot be solved without buying something like R5000HD modification to add to your receiver. (See other threads on that topic).