My budget is around $750. So far I have come up with Canon 550D and I think it's a great choice to shoot a low-budget short film. I am just seeking your advice to see if there is any better alternative I can use with this budget. Cameras with Flip-out screen are preferred. Any advice would be appreciated!
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The short answer is anything that works for you. IMO, the 550D is a fine choice if it works for you.
The long answer? Even if you need to postpone the film, make sure your script is FLAWLESS. Shooting with a Red can't save an awful script, but I've seen some ~awesome~ shorts & features shot with a Fisher Price PXL-2000 and the Flip.
Beyond that, understand lighting. Know where your light is coming from and how to use it to make your scenes less muddy or grainy (unless that's what you're going for stylistically). Consumer camcorders are less light-sensitive than their professional brethern.
Also, make sure you can record decent sound. In most cases, on-board microphones are crap. That being said, bad sound makes a mediocre script awful. amazing sound can make mediocre scripts a touch less painful to watch.
One other thing you may want to try: network with other filmmakers and see what they're using. See if you can rent or borrow cameras to see what you like to work with. Who knows? I've shot films and donated my gear to the cause because the script was AWESOME. You may run into someone who's willing to support your vision with a camera donation.
But start with your script.