First off, with a budget of <1500 you should be checking out Ebay, Amazon, Projector People and last, but never least!, the AVS classified ads. I finished my theater setup with a projector from the classified ads, and it's not new or anything, but extremely low hours, and the picture far exceeds anything that would have been in my price range originally. Projector lamps usually go for 2000+ hours, so if you can find a used projector that fits your needs with less then 500 hours on it, it might be worth it.
Secondly, the 8350 is an extremely bright projector, with loads of horizontal/vertical lens shift which makes placement very flexible. the only thing that I did not like about it is when you are gaming on it, there is just enough lag(IMO) to throw off your game. I play COD and when I demo'd the 8350, I could notice a slight(we are talking milliseconds!) lag that would just through me off, I'm sure I'm more particular than most but it's something to consider, and the 8350 does not have any CFI(120Hz) to help combat that.
I've also heard extremely good things about the HC4000, and IMO DLP does a much better job for gaming(quicker response and sharper image) but I'm unsure if the light output of the Mitsubishi will be great enough for your room. Just depends on when and what you are watching and what kind of ambient light/screen combination you go with. good luck, though, I spent nearly a year researching before I bit the bullet and I'm floored everytime I throw a movie in!!!!