I built this in 2010 and upgraded to that processor last year. I'm seeing decreased performance with some of the newer games at higher settings, and even with CPU intensive things like multi-tasking videos/games and rendering/messing with videos.
I had thought about an i5-3570K setup, though I don't overclock much beyond air (unless I could do it with the corsair enclosed water coolers), but then I saw some recommendations for the new FX chips by some people.
I'd like to reuse the ram (maybe had two more sticks if thats worth the month), case, and power supply. otherwise, I'd like to get as much performance for my money frmo the last three while still markedly improving my processor. Budget is the 500-600 range at most, Newegg is my best bet, though Microcenter has some deals and isnt' too far away.
I mainly play wow, CS GO, BF3, and would like to play Crysis 3 and such games on higher/top settings in the near future.
That's still a pretty killer processor, and it overclocks easy. I'd suspect your gaming performance woes are more related to your 5850. I'd try a new video card first and a small overclock and then see if you still feel like you need a system overhaul.
When you say "reduced performance" does that mean compared to how it used to run, or compared to where you think it should be?