You can always replace the battery yourself - it is not as difficult as you may read.
apple wont replace batteries in aus but can sell you a 'refurbished' one for just over $300aud.
Series 1 parts are a lot less expensive than series 3 and 4, eg series 1 lcd $55aud versus series 3 at over $250. However, a later series has less micro connectors making repair easier.
Please to see that apple in usa have a battery replacement policy for older watch series.
In aus, it is just a replacement for $300 or so. Better to put that to a new series 3.