I've never used the Headroom Amp DAC, but I have been using a Burson Audio HA160 headphone amp with my HD650's for a couple of months now and the combination is excellent. However, that would consume most of your budget ($699) - But, Burson are bringing out a new product, the HA160DS ($890) which is a combined head amp and DAC. I know that's more than you wanted to spend, but if you're considering products in that price range, I would go for the Burson based on my experience and the reviews I have read.
Alternatively, you may be able to pick up a second hand Burson HA160 head amp on the For Sale forum, leaving enough cash for a decent DAC such as the HRT II+ which I use (and thoroughly recommend).
Hope that helps.