Wonder no more.
Yes....the Jaws will drop so far you'll be wiping spittle off the carpet.
Really though, your concerns and hesitation are common and quite typical for most 720p Pj owners who have seen scaled 1080i on what was widely acknowledged as being a excellent performer....in it's day. But in fact, you never went beyond the Z3 to the Z4 or Z5, both of which sported progressively higher Lumen output while steadily increasing Contrast specs, so even within the "Z" genre, you have no comprehension of what your missing. That Sir, results in your all too easily dismissing the potential satisfaction a truly spectacular upgrade would offer you.
Now, the 8350 is not just a PJ that has true 1080p resolution, you have to dare to compare all the differences:
..........1280 x 720 vs 1980 x 1080
..........and 800 lumens vs 2000 lumens
...........Zoom 1.3:1 vs 2.10:1
..........and 2000:1 cr vs 50,000:1 cr (AVS doesn't have a emoticon that expresses that difference...)
And lastly....the original price of the Z3 was $2495.00
....and your looking at an opportunity to get the 8350 for $799.00( $7999.00
Bob...this is a argument you can afford to lose. I will personally assure you that you will be astonished....especially seeing as you obviously haven't experienced anything remotely akin to the performance differences. I don't make that assurance lightly....it comes from a wealth of experience (...maybe 20+ Z2s-Z3s-Z4s-Z5s installed...) with the Sanyo line, and the chance to upgrade almost everyone who ever bought a Sanyo to the 8350. Almost every one of those Owners was a clueless PJ enthusiast who got into the "Big Picture" at my bequest, and yet still upgraded to the 8350 because I could easily also assure them of the huge difference that awaited them.
Another thing...the lens shift issues were primarily cases where the positioning could get jarred from excessive vibration ( crazy bass levels, or upstairs stomping...)
No PJ can claim being perfect, or something for everyone.
But a 8350 for $799.00 covers a very wide cross section of cheap-ares projector heads who want more value and performance than one should have a right to expect.
So just do it......................or not. It's your choice to make.