Hey Rob,
I'll share my experience and thoughts, because I think we're kind of in the same boat. I started with extract and PM too, with a 3 gallon walmart pot. I upgraded to the 8 Gallon OBK pot with the ball valve and thermometer and it was on sale for about $80 at the time. Now, I wish I went for 10 gallon, but the 8 gallon is workable. I did a few more extract/pm kits with the 8 gallon, then switched to BIAB.
In this pot, I max out at about 10 pounds of grain. I'm able to make 5 gallons of a 1.055 beer, but after trub loss during fermentation I come out around 4.5. Fine enough for me.
I bought a 60k burner from Canadian Tire for $50 and it works great, really sped up my brew day vs boiling on the stove.
The big limiting factor of this set up is that I have to put all of my grain and water in the Boil Kettle at once, and things are very tight. For this reason, I think I'm going to build a mash tun before my next batch.
BIAB is a great... the nice thing is if you go that route, the only equipment you'll buy and won't use if you upgrade is the bag.