TomK
You can spend any amount on a rod and reel. I would take my 8foot 4 weight 2 piece or 8.5 foot 4 piece 5 wt. Both are Sage. My Orvis presentation reel is as fine as they get, but a Daiwa (that costs 1/1oth as much) doesn't weigh much more and a fly reel for backpacking is just a spool that holds your line, the brake mechanism is immaterial, and thats what makes a fine fly reel - a fine brake and smooth machine work.

Since the rod case weighs more than the rod, and since a cheap rod needs no case - you don't need to spend much on a new rod, and consider the total weight of the setup before you decide to change any pieces. Then decide what your budget is and go for it.

Jim