Nice...that was a deal I posted. Glad you got in on it and everything's running well.
Have you tried using your 4850 on the new PSU, by any chance? I'd be curious whether it was the PSU all along.
I ended up tossing it in the trash on the day the computer ceased functioning. Between the error code from the MB saying it was a failed video card and a lower end replacement firing up fine. I figured it went to the video card heavens and gave it a burial in the moday morning trash pickup.
I am extremely happy about having access to a cheap 5870. Made for a relatively simple upgrade. Install, update catalyst drivers suite, and away we go.