While it is true that higher shutter speed always helps with sharpness, noise hides in the shadows and noise kills detail. Particularly with a camera like the D80 which has a CCD sensor, noise shows up badly if you underexpose and try to recover detail in PP. If one wants to push exposure and recover in post, better off pushing the right side of the histogram. There is more data in the raw file with more light and less noise. You can typically recover at least one stop of "blown" highlights in raw.
With ss of 1/1600 in this image, that wasn't likely the source of blurriness. Not on a BE in straight line flight. Also the far side wing looks sharper than the head and near side which suggests the focal plane was beyond the bird's body.
This is a tough situation, Christina. You were all set up to shoot one subject and had to take a quick shot at something completely different. Pretty cool that the bird was looking down at you. Either that or you were real close to something edible that he was looking at
But sounds like now you know where he hangs out and opportunity is a big part of the game.
By the way, I was confused by the original post. When you say 100% crop, do you mean that the image you posted was cropped down to full resolution?