"I am telling you for a fact, that with the LS25MK2 in home theater bypass mode, it does change the sound from your ht processor and not in a positive way."
What I don't understand is how you make that comment inasmuch as you need to use the throughpass mode to accept the L + R main channels from your pre-pro to be used for HT.
Now if you tell me that you are using the preamp part of your processor for 2 channel music I would suggest that any good 2 channel preamp will always sound better than a HT pre-pro.
For you to suggest that the sound is degraded by your ARC preamp suggests that you have to have used only your HT pre-pro for music listening without using the thoughpass input (IOW, your L +R main outs from your pr-pro go directly to your amps). I have done this with my system and I still disagree with you. There is just no degradation of signal when used through the "processor" input on my Ref 3