Do you WANT to spend 2K? If you do, you could probably get a wicked i7 build or Phenom II build out of that...I haven't been up on that newer stuff lately though, but others will be around to help you on that.
If you want to stick of best price/performance ratio:
Kick the E8500 and get an 8400
Kick the C2D altogether and just get a Quad...they've really come down in price. Worshipme will probably help with this cuz he is usually pushing the Quad bandwagon...I personally have only owned C2D's due to the prices when I purchased.
DVD drive looks A.O.K...I've got Samsungs in mine. My older one just went out but they are so cheap that I don't care. The other one's working fantastically still.
If you don't need a 1TB drive, don't get it and saves a little dough.
I've got 2 of these
750's (one internal, one external)
a decent 500GB
You can get equally good PSUs for a lower price:
I've got this OCZ
Here's this Thermaltake
Here's a nice P45
RAM choice is great. If you plan on OCing, OCZ tends to be better (so I hear)
Your case is kinda spendy for a midtower (IMHO), but I don't know what you like and don't like so I won't suggest anything.
Also, for the money, I'd suggest this 4870
...but I have no idea how nvidia's stuff compares with ati's cuz I haven't needed a gfx card in a while. I'm not sure but I know nvidias new stuff is better than one you have down. Someone will probably help you here.