It's got to be holding it back. Your GPU was made for PCI-express 3.0 lanes and you put it in a motherboard running PCI-express 1.0 lanes. This means the GPU is getting 25% of the bandwidth that the card is capable of using. That being said, studies have been done on the affect of running newer video cards without all 16 lanes available to it. Dropping its bandwidth in half (aka, an x16 pci express 2.0 slot or a pci express 3.0 x16 slot running at x8), generally does not have a noticable affect on the GPU's performance. Dropping it down to a pci express 1.0 slot will reduce performance by a bit, but not by much. (source: http://www.behardware.com/art/imprimer/850/).
The issue you'd have wouldnt be in PCI express bandwidth, but in CPU cycles. I'd suggest upgrading your mobo/cpu, but you don't need to go crazy getting the best i7 or anything. If you get an ivy bridge i5 (3xxx series) you should see the same performance increases as an ivy i7 for gaming.
I don't see the point in waiting for haswell if you are going for gaming performance. I don't believe it'd run your games much smoother than an ivy bridge processor.
Well the bandwidth is an issue but also his CPU is running on 4-5 years old now so when you get a chance you may want to look into changing it out. Also memory bandwidth is quite a bit faster now then it was during socket 775 so that could also be a contributing factor in his performance. A 7850 isn't a bad card for you you just need more of a bucket upgrade withstanding your graphics at this point to really get the most out of your games.