I'm a fraction under 5'8" and also have a 32" inseam. I do have a few pounds on you at 160 I did not need a WSD frame. My bike is a 52cm Cannondale. A 54cm frame is too big for me; I wouldn't be able to stand over the frame flat-footed (which I can just do on the 52). I'd recommend you try them both and see what you are most comfortable with. Remember that the handlebar riser can be changed and saddle adjustments made in order to zero in on a more perfect fit.

There are a lot of fine bikes available in your price range. Cannondale, Lemond, Specialized, Trek, and Fuji are all brands you will not go wrong with. Ride a few different frames- carbon, steel, and aluminum- and see which you like the best. Mine is an aluminum R1000 which is a little more than you are looking to spend, but it was the most bike for the money I could find. I did a lot of shopping and comparing. I was very interested in a Lemond steel-framed bike, but the Cannondale had the better componentry for the money, so that's what I went with.

Whatever you buy, good luck with it and enjoy!

wendy