What would you do in this situation?

[The Lone Gunman]

It has got nothing to do with what others are getting. You are a business. You base your rate on what you think you are worth and what the market will stand.

Make a business decision not an emotional one.
Long term income at lower rate is better than short term gain.
If the market is up then move on and fill yer boots.

[Rocket]

I had a similar situation in that my intial role 'x' expanded to include 'y' and 'z' and the market rate had increased by quite a bit as well since I originally started.

I spoke to my agent and to my boss (who is also a contractor) and presented them with a letter with recommendations from others I have worked with on this project (bosses, not just others at the same level as me) as well as an outline of the current market rates for my skills and a list of the additional responsibilites that were not part of the original contract. I then told them what I wanted as an increase (current market rate + a bit more) and left it with them.

In the end, I got a 20% raise and although it wasn't as much as I'd asked for it was well within what I was prepared to accept.

There's nothing stopping you from testing the market...if you get an offer from somewhere else you can always go back to the current client and see if they will negotiate...if not, off you go.