So I purchased a HP G8 Microserver with Xeon processor and 2x 1TB drives.
I installed a 3rd TB and installed Windows Server 2012 R2 Essentials on it. It wasn't as straight forward as a basic server install but it was still fairly simple once I did a little reading. I partitioned a 250GB portion of drive 1 for the OS leaving 2.75TB of storage compared to the 2.75TB total I had for the WHSv1 install on the Mediasmart. I then installed Stabilebit's Drive Pool onto the server and created a pool out of the remaining drives/partitions. That was straight forward and easy. It works like Drive Extender did in WHSv1 and only cost $30. I'm quite satisfied with the purchase. Then I copied the 1.45TB of photos and other media to the drive pool and have a new fully functioning server.
The 2TB external drive will remain as a back for now. My plans are to eventually purchase and install a 250GB SSD into the optical drive spot on the G8 and replace all drives with 4TB drives using all 16TB for storage. This will be done in incremental upgrades. Other HDDs will be used as onsite and offsite backups in case of loss of data / etc...
It cost me $700 for the Microserver and it's pretty much a more mature direct replacement for the Mediasmart server. For one, it's more powerful. It also has the capability to be set up as a RAID with the internal RAID controller (which I didn't do). It also has an expansion slot where a better RAID controller will eventually be installed with an external SAS port for my onsite backup solution. It DOES NOT come with an OS like the Mediasmart did. WHSv1 was a great OS for what it did at the time, but Server 2012 is obviously a more powerful OS and with the better hardware will serve my needs better. The G8 also has somethinge called iLO, which I gather is for remote access and trouble shooting over an internet connection. The box itself includes 2 1gB ethernet ports which will be good for data streaming when I get my home network totally setup. It's also fairly quiet after it boots and the fans settle; that's comparable the the Mediasmart box. I was looking at a low end Dell T320, but through my experiences at work, it's physical footprint is larger and it's much noisier.
The drives will be the other expensive part. 4 4TB WD HDDs will run about $600 unless I can find some discounts and sales. The SSD will probably be at least another $150.