Your situation is hopeless with the current case because like you said, your cpu heatsink actually touches the hard drive cage.
I recommend getting either a full tower case, or a YY-Cube case. The YY will probably be a better choice since it is designed with hot-running hard drives in mind. It's kinda pricey, but well worth it. The YY also serves as a pretty nifty water-cooling case when you decide to take that plunge.
There's a number of us here using a YY-cube. It's about 13-inches square at the front.
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