Go to the classifieds. Post a WTB 8wt steelhead rod/reel/line combo. Prefer a multi tip line so that I can fish varied depths/conditions.
Find yourself a versitip line, large arbor spool and a rod from a year or three ago and save some $$.
I would stay away from rods under 9ft. 9.5ft probably being your best length to offer the most versatility. Get a multi tip line as mentioned above, unless you plan on doing a lot of floating line work. In which case I would get a steelhead taper and a couple of sinking poly leaders just in case.
2nd to AndyD's recommendation above. A 10' or 9-1/2' would suit most steelhead water a lot better than an 8-1/2 to 9'. You can swing, nymph or singlehand spey in which almost all these cases you'll find a longer rod to have many advantages, line control being formost.
Unless your money is burning a hole in your pocket, and even if it is, you'd be best served to read, read, and then read some more. Everything that can be written on this subject has been, and much of it is in this forum. Ergo, learn to use the search feature. It's all here.
That said, just as the 9' 5 wt is the "all around" trout rod, a 9 or 9 1/2' 8 wt is the all around basic (every expert has one or more, usually more) PNW salmon and steelhead rod. You will likely add to that collection, but that is a perfect place to start. Further, unless you're already an advanced fly caster, you'll cast just as well with that Cabella's $59 Three Forks cheapo as you will with any $700 Sage or other high end rod. You could buy the cheap rod while you're learning what the fuck you're doing and then keep it as a back up after you've made a well informed decision about which high end rod to invest your retirement account in.
The cheapest reel that's worth a shit for salmon and steelhead fishing is the Pflueger Medalist ($35), and they are better than most reels you'll spend $100 or more for. A good reel will run $200 and up.
The most versatile line for someone who knows nothing is a multiple tip line that allows you to switch from floating to sinking to super-fast sinking tips. Not my first choice, but that's probably because I think I know what the fuck I'm doing.
What a salmon/steelhead angler really needs is good waders and wading boots. If you can't wade well, you might as well stay home, in which case you really don't need the rod or reel either. The bar for decent waders seems to be Dan Baileys at $200 and some others that begin at that price point, and of course, you can spend more. The thing is, don't buy lesser - or refer to the above about staying home.
Then read all the available literature and forum posts on steelhead fly fishing. At that point, you'll actually be ready to begin to learn.
There, I just saved you at least $500 if you're smart enough to absorb it. And we don't even get paid for helping you out!
check redsflyfishing.com. they have awesome packages at 500 or less. Are you dead set on a sinlge hand? You could try a full spey in 7 or 8 weight from reds full set up (ready to fish) for 499. They pay shipping and tax
I agree with looking for used, lots of good deals out there. However, when I first moved here I did some reasearch for an idea what I wanted then headed out to my local fly shop. It was a good chance to pick the brains of the shop guys on techniques, locations, gear, etc. I think I got setup for salmon (beach fishing) for under $500 (rod, reel, line) including a Redington RS4 9ft 8wt, a Lamson Konic, and an outbound line (for the beach). If you want to go new, look at rods from Redington, Echo, and TFO. Lamson Konic is a very good reel as a great price (~130 iirc). Nearly 4 years later and I'm very happy with the setup still (both the reel and rod have lifetime warranties).
Recently I got a SRC setup and went with a 9.5' rod. I think my next rods will be 9.5' too as it's a really versitile length.
I agree with Skibum. The lower end Redington, Echo and TFO rods are very very good for their price points. You can get one of those and a Lamson Konic for around $250 and have some $$ left for a line, waders and boots if you don't have them yet.
Having just gone through a search for new waders myself, I'll share what I found. I think that the Redington Sonic Pro waders are the BEST waders you can buy for under $300. They are awesome and Redington is on BI and really stands behind their stuff. During the MA-9 opener I think about 75% of the fly guys I saw on the beach had these waders. If you have $400+ to spend (and want to spend the extra) obviously Simms are hard to beat. However, for the price you can't go wrong with the Sonic Pros ($250). I wouldn't go with a lesser wader either (after having many pairs of lesser waders). I have heard that some "bigger" folks prefer the Dan Bailey's over Simms/Redington for a looser fit. Can't go wrong with either 3 brands but buy breathable.
I have really become a huge Redington fan since moving here. They make a great product for people who don't like spending the $$$ for Sage and Simms and they have a very comprehensive product line.