So, after exhaustive discussion with my sensei and the few guidelines you gave here - the blade I have is suddenly feeling like a trashbag in the corner of the room. It does look nice, but knowing the 'truth' about it now just doesn't let me enjoy even it's good looks anymore. =p
Obviously, I'm not going to go show it to my sensei for his opinion.

With this though, a new question popped into mind - if I don't have a sword, what's the type of sword I should be looking for? Ok, so my sensei said $800 are entry level swords if you want to cut - but lets say I just want something to practice kata with.
If I understood right, it should be tempered in 1060, have a proper hilt with that bamboo knob so the hilt can be removed, and the hilt should be properly wrapped so that the wrapping doesn't loosen with time? Are there any other good pointers as to what a good _entry level_ sword/iaito should be like, or any pointers what to specifically avoid?
I'm willing to buy something of slightly inferior quality for kata practice at first - if only so that I'll get used to practicing with a sword instead of a bokken. Is this a bad thing? Is there even anything like 'slightly inferior' that isn't totally crap? What are good manufacturers that ship internationally? Note that in my iaido organisation only those with dan degrees are allowed to practise with sharpened blades, so I need an unsharpened one.

My sensei also said that if I want a cheap blade, I might want to go for an iaito where the blade is cast aluminum, for the simple reason that while it's not sharpenable, its furniture (is that the word?) is way better than that of a forged sword in the same price range?
This post ended up being alot of rambling and to some part stating things that might be entirely wrong - if so, please correct me. I don't care about being wrong, as long as someone tells me whats right. =)
Thanks!
