Ok, I like what you did with the backround on this one much more, I think you are much closer to desired effect than on the original, good job there.
I must agree though, at larger resolution the bird is really quite out of focus. Not real sure how sharp the bird was to begin with, and certainly no expert on post production work, but how about removing the bird entirely, doing your thing with the backround and hten replacing him (or warking on him as a seperate layer and then replacing him)?
I see what you are trying to accomplish and I applaud your efforts...a little tweaking and I think you'll have it nailed.