Everyone is right that you need better equipment if you want to get better results in low light. If budget is tight, the cheapest bet would be to get the 50-200 zuiko mark I. Used, it can be had for a bit over $600. Mark I is cheaper than Mark II, but my understanding is that the main difference, which is focusing speed, is not really noticeable on the e520.
If budget is not an issue, then a newer body and the 50-200 mark II would give you faster focus and the opportunity to use ISOs higher than 1600.