1080p 32" TVs were around for quite a while, but they started phasing them out over the past year or two. You can still find them in the occasional place. I've seen some at Costco.
If you want to up your budget a bit you can probably pick up a 42" 1080p TV for about $400.
My Sony 32" LCD 1080p was around $399 four years ago, so getting a 42" for the same is a steal!