As a geek, I know it is always fun to try to "Do the best with what I have", but in this instance I would get a new server. (Whether or not you feel you absolutely need it)
For one, budgets change, if they can afford it today, they may or may not be able to afford it tomorrow when you absolutely need it. Your application will surely run better on a new box, and I'm sure there is a project out there you've always wanted to do, but never had an extra server for.... now's your chance.
Also, like previously stated, you do not want your day to day operations running on a server that is end of life. With a new server this won't be the case.