craigslist! I am bowled over by some of the deals that I see posted in my local CL. Many are in your price range. I bet you could score a used high quality mtb frame that is way out of the $350 new range. After seeing some of the deals out there, it would be hard for me to seriously consider buying new. I would have a feeling that I was spending too much for too little. If nothing else, at least take a peek, you might be surprised.

Another option would be to throw your $350 at the rockhopper. Give it the wheels/drive train/front-end that it always dreamed of. Thats the route I have been going with my bikes.

Had to come back and add some examples. These are just out of one CL results page. It really goes on and on:
http://seattle.craigslist.org/see/bik/295905216.html
http://seattle.craigslist.org/est/bik/295825646.html
http://seattle.craigslist.org/sno/bik/295767337.html
http://seattle.craigslist.org/tac/bik/295946713.html
http://seattle.craigslist.org/see/bik/295933318.html (prob too small, but note the price)