Neil, You are correct with your assumptions and my gear. I have borrowed a friends 300mm 4.0 and paired with my 1.7 TCE on the D7000 and had less than stellar results. I shot with high speeds > 1/1000 but never felt like I got very sharp results. Unfortunately I had the lens in the winter in the Northeast. The couple days I got to use it were mostly overcast and I'm sure this stressed my focus accuracy. Hand holding 500mm may not be very practical for me.
I had hoped a better Auto focus system would help me, but perhaps I need to be a better photographer instead of simply getting additional gear. I don't feel like lugging around or purchasing a big/$$$ tripod with a gimbal head at this point. Thanks for your input regarding 500mm on DX. I dont feel as bad about my results now.
"Cameras and lenses are simply tools to place our unique vision on film. Concentrate on equipment and you'll take technically good photographs. Concentrate on seeing the light's magic colors and your images will stir the soul." Jack Dykinga