Upgrade from Proac Response 1SC?

You might also look into ATC or Joseph Audio. Not sure if they make anything within your budget.

I had the 1SC. I then moved to the D15.
I now have Merlin VSM which I love.
You can get a used pair of the TSM (bookshelf version)at a reasonable price. While I have not heard the TSM, I understand they have a strong family resemblance.

Thanks, everybody, for the responses. Some very useful recommendations here. Some of these speakers would be a bit difficult to audition (for example, the only Merlin dealer anywhere near me is some hundreds of miles away in Southern California). I want to stress that one of the things I particularly like about my ProAcs, apart from their very accurate stereo imaging, is their inherent musicality. It's just that with my system and my room, the Response 1SCs are a bit shrill. Anybody had experience with ProAc Response D2? Larger drivers, but not sure how the sound differs. Looks like these may still be a current model.

The D2 is a current model. I think the newer Pro-ac speakers image better and sound less veiled. I used to have Response 2 speakers and the newest generation is better, I think some of the improvement is due to materials technology in the new models. I have not heard all of the speakers recommended in this thread, but I have heard the Joseph Pulsars, which I thought were too bright and analytic.

Update: Since my original post, I've auditioned a few speakers, including several models from Fritz Speakers (he was kind enough to bring them over to hear in my own living room and though I found much to like in the Carreras, I still thought the Proacs appealed to me more), a pair of Harbeth C7ES3s and Devore Fidelity Gibbon 3XLs. I haven't jumped at any of these. Interestingly (and contrary to much popular opinion) I just couldn't fall in love with the Harbeths though I did appreciate the things they do so well, namely that beautiful midrange presentation. The trouble was that they rounded off too many of the sharp edges for my taste. The details are all there, but wrapped in soft velvet. The Devores are obviously excellent speakers, but I think the mistake we made was hearing the Harbeths first, before the Devores. The latter's smaller drivers and smaller soundstage were an unfair contrast to the Harbeths. Without hearing the Devores in my own living room I couldn't bring myself to make the commitment, and there wasn't an option for in-home demo. After the audition, I did some more listening to the ProAcs, and am again reminded what it is that I like so much about them. Still haven't heard the Merlins yet.