CPU Choice LGA 775

Hi, im a semi-gamer on a budget.

About one year ago i was given for free a Lenovo Business Centre, it had a LGA 775 E7300 2.66ghz processor, 2gb 1066mhz ddr3, dvd-rw, 280w psu.

I dropped the 2gb ram in favour of 8gb(4x2) 1333mhz ram(max it can take in both amount and speed).

I then fitted a ATI 6570 2gb ddr3 GPU (low profile as is slim case).

is it worth upgrading my processor, after a quick browse found a E8600 for £65 or a Q9650 for £140.....i realise the quad is better but at more than twice the price is it worth the stretch?

My main fear is will i have a psu problem with the q9650 and any cooling issues as being a slim case there isnt exactly much room for extra fans or bigger heatsink. its so compact i already have to fiddle with cables to get the damn thing to shut.
Currently the e7300 idles at around 45c and gets to high 60's sometimes even low 70's when gaming. The gpu ive seen hit 86c. (speed fan utility used)

Any help/recomendations welcome.
I just want to extend the life of my system for another 12 months for me to save then im gonna attempt my first complete build.