$500 Digital Source to Complete $2K Bedroom System

My objective is to build a bedroom system for $2K and need some advice on the digital source.

Equipment purchased: Sophia Baby, Zu Omen, Squeezebox, Zu & Kimber cables
Balance of Budget: $500

- CDP & Squeezebox source
- Components <13" wide (shelf width)
- Sophia has 1 input

My options:

(1) DACMagic or MF V-DAC (~$300) and CDP for transport (~$200). CDP & Squeezebox -> DAC -> Sophia

Q1. What other ~$300 DACs (with 2 inputs) should I consider?
Q2. What's a good CDP for transport (~$200 & <13" wide)?

(2) CDP with digital in. Squeezebox -> CDP -> Sophia. I like the Quad CDP99. It's 13" wide & has dig in, but it's >$500 used.

Q3. Other CDPs with dig in, ~$500, and <13" wide (preferably)?

Q4. Other suggestions?

Not impressed with the Quad. I had it for a while. What about a PS Audio digi link iii for $500 and a very cheap CDP for transport, and then rip all your music so you're mostly listenting to the squeezebox?
mf v-dac is a really good choice. for a narrow cdp transport, you might look at cambridge sonata (you should find one around $200). musical fidelity also makes a narrow cdp (x-ray), but it'll be pricier.
Wadia 170i Transport and an Ipod Touch... Plus the house wifi.
Pure ipod dock N a 160gb ipod