Equipment for indoor volleyball photos

Not sure if this was the right forum to ask this in as it's, in large part, an equipment question, but here goes.

I have a Canon EOS Digital Rebel XTi (several years old) and an EF 70-300mm 1:4-5.6 IS USM lens.  I've tried using this combination with every setting imaginable over the last couple of years to take photos of my girls playing volleyball with very limited success.  I either get pictures that are too dark (lighting in the gym is typically very poor) or blurry arms/balls during action shots.

Now the camera body seems to have a problem - it won't work with the lens on.  Since the camera is out of warranty, I'm faced with either taking/sending it in for repair - which I can only assume will be very expensive if possible at all - or buying a new camera.  Given my past disappointment with the pictures, I'm leaning towards a new camera despite not wanting to spend the money.

So, my questions are:

1. SHOULD this combination produce good results - thus justifying potentially trying to get it repaired?

2. If not, would love suggestions for a new Canon camera and, if need be, lens.  I want another Canon because I have 2 lenses that I can continue to use (including the one mentioned above) and it seems a waste to just start over from scratch.

I'm a total novice so would appreciate any suggestions anyone has.

Thanks.