Like a lot of other people are saying, used is the way to go with your budget. I took at look at your local craigslist, and listing for bikes are pretty sparse, but this bike looks pretty good.
http://juneau.craigslist.org/bik/3111328534.html
So long as the bike is not too worn out, you could probably negotiate the price and spend the rest of your budget on a set of pedals and a tune-up at a local bike shop.