I have this old flute I just dug out of the closet that I've been playing for a couple weeks. It's so tarnished that I'm not even sure what kind it is, but it says silver head on the head piece. I think it's an old armstrong. I got it in some junk store about 15 years ago for $50.

I have no formal training on the flute, but I really enjoy just picking it up and just playing stuff: e.g., jazz, latin, stereolab, somafm, etc. I can get nice tonalities -- though I am perhaps constitutionally/permanently limited in the upper ranges (or maybe it's just the flute, or improper technique, etc.). People generally seem to say it sounds pretty good, though. I'm actually a guitarist, but I developed carpal tunnel and can't really play that much now until it heals, so I was going crazy and then I came across the flute I forgot I even had. It doesn't seem to affect the wrists at all, so I thought I might go ahead and try to get better.
Here's some of my questions though. Everything feels pretty natural as far as fingerings, but I noticed the low F intonation is pretty out of whack. I was compensating easily enough by tilting the flute, etc. but I was concerned about developing that as a bad habit. So I used an online tuner to find out exactly what was going on, and I was shocked to discover that *it's actually been tuned down a half step the whole time!*

I adjusted it to concert pitch as best I could, but tuned that way it sounds totally out of whack. All the fingerings feel a little weird, too, but I guess I would just get used to the correct ones if I got a proper flute. But I'm wondering -- this is likely just the result of a junky flute, right? I mean the intervals seem totally wrong and it has none of the same resonance or naturalness to it. Every note is just slightly out of kilter. Whereas except for that low F (which isn't even really that bad) it actually sounds spot on perfect -- and even really nice, actually -- when it's tuned a half step lower. Is that common with flutes, or am I misunderstanding something about their natural pitch and how they should be tuned, or what? It's so bad that I immediately just moved it back to where it was and am continuing to use it that way for now.
The next thing is that in considering a new flute, the problem is 1) I would definitely not like to "downgrade" from a silver head to plated, even as junky and out of whack as this flute may be, it still has pretty nice sonorous tones, especially in the low registers, but 2) I don't feel that I'm really good enough (or dedicated/disciplined enough, etc.) to warrant spending $500 or more on a good intermediate flute (I really want one of those silver head pearl quantzes -- 665, I think it is, or something comparable, jupiter maybe, etc). I just want to improv and play jazz, etc. and have it sound good, without spending past my limited abilities.
So the question is: what should I do? Would a lower entry level silver plated flute still probably be better than this old beat up armstrong, even thought it's got the silver head? I'm all about the TONE and I really can't get the same enjoyment with thinner or less dynamic tone. On the other hand, realistically I probably will never practice scales, etc. or really dedicate myself to practicing formally. Once my wrists heal I'll resume the jazz guitar studies again, and all my music energy will likely be focused there. I'm just interested in flute improvising and jamming, and hopefully developing improv technique that way, more informally. I just don't know if I can justify spending $500-1000 for what I actually want, or if a more basic entry flute (like the pearl quantz 505s) would be "good enough" and not a tone downgrade from the silver head.
thanks for reading all that. thought I would just lay it all out for the experienced people to get a sense of the whole picture and be able to make a recommendation. appreciate any comments or advice.
