At what point is an external D/A converter warranted or beneficial


Over the years and after multiple "upgrades" I've become disillusioned with digital audio reproduction. As my systems improved in quality/resolution, the digital audio quality has equally deteriorated to where most listening is now done in analog. This makes my CD collection of in excess of 1000 titles pretty much useless. My digital D/A conversion knowledge is pretty much limited to whatever is done by the internal D/A converter of the equipment. That being a Lexicon MC12B processor and Oppo BDP103. As my choices of ICs went from basics to high quality resolution improved with a marked decline in digital SQ. I'm at a point where any Redbook CD presents a harsh, edgy, shrilly, bright, name it what you want, upper frequency. Changing ICs back to basic cables attenuates this along with resolution of the music played. You might say I'm at a loss. Do I live with less resolution or the digital limitations. I do not have this issue playing analog media. Would an external D/A converter be beneficial or a waste of money? 
Systems are: B&W 803D2 and surrounds,  Lexicon MC12B, Oppo BDP 103, AQ Columbia ICs XLR & RCA,  AQ Digital ICs,  Tara Labs speaker cables,  Rogue Pharaoh, VPI Prime . Analog front end shares the L/R front speaker and input from the Oppo. 
Is there such a thing as an external D/A converter for a H/T setup as the Lexicon processor is the oldest piece in the chain with most likely the weakest D/A converter. But how would that connect to avoid the internal processing.
Any suggestions or recommendations?

gillatgh
Well first of all your choice of wire is only making a bad situation worse. Since you have vinyl, if you want to hear what I’m talking about get yourself a few records on the AudioQuest label. Terry Evans Putting It Down, or Doug MacLeod You Can’t Take My Blues, or Mighty Sam McLain Sledgehammer Blues. These are all great blues, more importantly for this purpose they are all recorded exclusively with AudioQuest wire in the recording chain. Then you compare that with something like Janis Ian Breaking Silence, Doug MacLeod Exactly Like this or Dick Hyman From the Age of Swing or anything on Reference Recording label, or any of the three Linda Ronstadt Nelson Riddle albums or anything else for that matter mastered by the great Doug Sax at The Mastering Lab. Listen to those bearing in mind the recording chain. Its pretty clear the AudioQuest sound is lean, exaggerates leading edges at the expense of harmonic development, and is just generally less "there".

Just thought I would mention that because while yes digital is awful and its great you’ve figured that out, both your digital and your analog will be a whole lot more enjoyable as you migrate away from that sort of hifi artifact type sound.

So now with that out of the way, yes the D/A will be a waste of money. Which if we can be dead certain of one thing, its that that won’t stop everyone from recommending you do exactly that. So let me give you an alternative outside the box idea that will actually make a difference.

Lots of people notice when they copy digital onto tape and play it back it sounds better. So you could go that route and get R2R. Which will totally give you audiophile cred. Bonus points to the max. But honestly, just about any HiFi VHS deck with decent tape will get you there, and for a lot less money. I know. Its what I did way back when I could barely afford the CDs let alone the player but I had a VCR. It works because the way HiFi VHS records audio is so good.

Anyway unlike any possible DAC ideas this one might actually make your digital listenable.
Hi OP,
You are describing the sound of digital from yeah, about when the MC12 was created, especially with Redbook.


DACs over the last 10 years are far better and, especially, better with Redbook. Older DACs tended to only sound better as the sampling rate increased.


I'm not sure how well the MC12 does analog, but it should have an analog bypass or analog inputs which bypass all the processing done inside.


If you want to hear how good DACs are today, maybe try a Mytek with 30 day return policy? They have built in volume controls and can be attached directly to your amps.


If you have the chance to audition in person, try listening with headphones. I think you'll be amazed how some of the affordable DACs sound.
Post removed 
Agree with Elizabeth on if the OP hasn’t touched the AC, that might be a wise place to start. I was questioning if my CDP/DAC was becoming my weaker link as after the addition of a streamer I am listening to my system more than ever or at least to when I was a really young audiophile in the 80’s.

Recently I changed out my receptacles which I have dedicated circuits and my system really started to open up so I started playing with power conditioners and etc. which I purchased a couple with good results and that’s where that ended.

Next I started reading a lot on newer DAC’s and no doubt there’s better than what I have for reasonable money but recently visiting one of my local shops they offered I try at home a PS Audio P5 they took in on trade so I did. Well, to wrap this up I was floored how the P5 sounds or my system sounds and now and I’m in no rush to buy a DAC now.

I’ll probably drag a DAC home eventually but sure glad I did this purchase first. Preamp, CDP/DAC and Streamer only on the P5.
@gillatgh  OP, If you are interested in hearing an all digital system, for comparative reasons, feel free to reach out via PM. I live close to you.
The damage has already been done by the time the signal gets to the DAC. The problems all occur in the nanosecond period of time it takes the laser to read the data. The system doesn’t recover no matter what you do downstream. Sorry to burst anyone’s bubble.
Thanks for all the suggestions and replies. Everything is useful.
Millercarbon- interesting suggestions I like them. Fwiw sold my R2R, Pioneer RT909 a couple years ago but still have 2 Hifi VCRS in the storage closet a brand new never used Sony and a Hitachi DVD/vhs recorder also barely used and lots of blank tapes. This sounds feasible to try. Thanks. PS I think that alone qualifies me as audiophile LOL.
To explain, my systems are totally seperate but share the Oppo as a source. Digital connection to the H/T (Lexicon) and analog connection to the Rogue.
I’m very satisfied with the AQ cabling for their resolution qualities. Could the Oppo D/A converter be the issue as it’s really the only common denominator between the 2 preamps/processors?
All suggestions will be taken into account less geo’s. I like his comments but don’t take him seriously.
As far as power and conditioning go, dedicated circuit straight from breaker box with 20 amp breakers 2ea circuits, upgrade outlets and Richard Grays power Co 4oos one on each circuit. Also the listening area has been acoustically treated.
Your Oppo cd p is Waaay down on the chain vs even middle 
of the road dacs ,  what is your budget ?  I have a BelCanto  dac 
that is very natural sounding, and there are some excellent 
Italian avacuum Tube dacs out there , Schitt Audio Yangs,
is alllways getting good reviews , your digital cable too can make a Big difference I have a Nordost   Heimdal-2 very good cable,
each cable to from other companies will give a different perspective as in dacs . Just like in analog ,each cartridge has its 
pros and cons.digital keeps getting better.it is now very musical if you take the time to tweak it power cords,interconnects ,even fuses count.
I think that handling your power well and a new DAC are what you need. I'm not sure how the MC 12 does with analog.

Here is my current thinking and experience on AC management:


https://inatinear.blogspot.com/2019/04/power-management-for-frugal-audiophiles.html

Best,
E
gilla,

Please come back with your conclusions after trying the VHS idea.
gillatgh OP
At what point is an external D/A converter warranted or beneficial

Over a CDP, one good reason it becomes warranted is "if" the dac has clock output and the transport has clock input, so then the dacs clock can be slaved to the transport, so both run off the one clock through an extra bnc coax or even toslink lead.
As it’s always better to have one clock for both, that way transport and dac are in sync with each other, just like stand alone CDP’s are, as their transport section is running off the same single clock as the dac section.

Quite a number of transport, dac separates have this, usually reserved for flagship models.
Arcam had a toslink one they called sync lock out and in, with the front button called Pro, on their top dac the Black Box 500 the transport was the Delta 250
DCS have it, MSB have it, Esoteric have it ect ect.

Cheers George
@firstnot 
I remember doing the copy CD’s to VHS thing back in the day when I had one on my rack, (still own but in the storage room) a Sony SLV-595HF. It actually did a fine job but lost interest real quick when trying to find certain tracks. Did the index thing with counter where every song was but no thanks. 

My Sony still has the remote and has detachable PC. A true Audiophile piece here. I’d sell it but I still have that big box of “Movies”. Seriously, it’s not for sale.
@adg101 That's the Sony unit I have in storage. Supposedly top of line back in the day. I agree finding a track was cumbersome.  Not much of a problem for me as I don't jump around much. I would/will hate the rewind though.
I think surround has been less developed regarding DACs than 2 channel. I know there is a Stereophile reviewer who tries different home theatre systems and DACs, you can try searching for it. I don't have my magazines nearby right now and can't look up the name.

If it is 2 channel you are mostly interested in improving then you can by any dac and connect it to your amp and just use the front end speakers. For example , this dac sounds interesting. 
https://6moons.com/audioreview_articles/mhdtlab/

If I was in your shoes, I would go to my local audio dealer and see what he or she offers for digital playback.  A buddy of mine recently took home an Electrocompeniet CDP and he was very please with it after multiple CDP attempts.  External DACs can help but you have to try to find what works in your system.  AC filtering is a must that is why the components I build and repair all get chokes to filter the AC.  BUT I am speaking strictly 2 channel.


Happy Listening.

I found the Stereophile articles about multi channel I was thinking about. There is a tag called "Music in the round". Has some reviews and comments on multi channel dacs and amps.

https://www.stereophile.com/category/music-round  
2 Richard Gray conditions? And you don’t take ME seriously. What exquisite irony!
I think all this talk about AC power and better wires is beside the point.

I think I was in a similar situation.  I listen mostly to classical music and had a hard time getting a digital system to sound anywhere close to as good as my analog.  Classical is audio's toughest test.  I went from Philips (heavily modified) to Lavry to Oppo.  Improvements, yes, but mostly they remained unused.  I am interested only in 2 channel.

About 18 months ago I took a chance on a very reasonably priced Chinese import.  Very large power supplies, dual ES9038 chips, discrete analog section.  The DAC gave me what I wanted, a sound that was as good, though not identical, to what I was experiencing in vinyl.  I have since been building around this DAC including the ripping of CDs and SACDs.  I write this only to let you know that there are now DACs out there that will, I think, do what you want.  I am not here trying to promote a particular DAC, as I'm sure lots of people will chime in with suggestions.

But digital has come a long way.
@geoffkait , love your comments. I feel privileged to be on the receiving end of one. I do agree with you some of the time. Like this time maybe, but no, they are doing as designed. Not the best I'm sure but better than nothing.
The pleasure is all mine.
The Oppo is probably the weak link in your digital chain.  You could send the signal out to an external DAC and hear some improvement in SQ.  A better and more meaningful upgrade would be to get a dedicated high quality CD player.  There's a significant difference in sound quality when playing CD's from my Marantz KI Pearl vs. my Oppo UPD-203---->Aurlalic Vega DAC.  Using the Auralic's DAC is a little better than the Oppo's DAC, but the Marantz is much better.
I won’t go down the rabbit hole of pretending one format being superior to the other.  Making some assumptions here:  you have a home theater set up; you are taking the digital out (optical/RCA/HDMI) from the Oppo-103 and processing via the Lexcion MC-12B (2-channel stereo mode).  Not sure what kind of bass management/filtering you might have, but hope there is nothing there mucking with the sound.  The Oppo BDP-103 actually has a pretty nice DAC.  For comparison purposes have you tried listening to CDs via the RCA outputs (don’t think you have XLR with the BDP-103)?  In the past I’ve had both an Oppo BDP-105 and UDP-205 in my system running balanced XLR into a 2-Channel amplifier with very nice results.  My gut instinct would be that the Oppo unit should give you better sound given the age of the chipset used in the Lexicon, but you have to decide with your own ears.  I’ve heard that B&W speakers to some can sound a bit bright (very analytical) which would be a bad combo for a recording that has a bright/edgy quality to it.  Switching to an outboard DAC could yield significantly better results depending on what you get (and if matches well with your system).  I would suggest auditioning various options to get a flavor of what is out there.  I have a PS Audio Directstream DAC which I highly recommend, but there are other good options out there as well (i.e. Mytek, Chord, Bryston, Schiit, etc.).  Do the internal checks with your current system first, and then audition some DACs - but don’t throw away your CD collection!  
You sound like a great candidate for one of the newer multibit R2R non-oversampling (NOS) DACs. Many people find them to be more "analog" or "organic" sounding than the more prevalent single bit or delta sigma DACs. A couple options in the $2000 range that offer in-home trials in case you want to explore this route:

This one uses low-level tubes in the output stage...
https://www.hifiwigwam.com/sw1x-audio-design-dac-1-signature-a-review-by-kevin-fiske/

Here is this designer's take on R2R NOS DACs vs. Delta Sigma DACs just FYI...
http://sw1xad.co.uk/technology_post/delta-sigma-vs-non-oversampling-r2r-dac-designs/

This one is solid state...
https://www.ebay.com/itm/132457413112?ul_ref=http%253A%252F%252Frover.ebay.com%252Frover%252F1%252F7...

There are others, but just a couple to get you started. Best of luck.
I really want to thank all who are contributing. It's all valuable. 
I tried the vcr tape idea suggested by millercarbon. Did it work? Actually yes it did and it cleaned up the highs nicely, not completely,  but nicely. But brother I'm here to tell you it's cumbersome.  Unless you want to listen to the entire tape finding a track is not fun or easy, rewinding is noisy and time consuming. It works but there has to be a better way.
gillatgh,

     I think I may have a good solution for you.  But I need to know if you have a full 5.1 home theater surround setup.  That is, do you have a center channel and rear surrounds and, if so, how are they amplified?  Separate amps or a A/V receiver?

Thanks,
  Tim     
@noble100, 
Yes H/T setup is full blown, front, center, surrounds, sub 5.1 setup. Processor and 5 Ch 250 W amp, D class. (The Krell died).
I'm open for all suggestions.
Ps. The only issue I have is the high frequency harshness, brightness whatever you want to call it when the digital source (Oppo) is in use. 
Maybe try Schiit Modi Multibit for only $250? I have that and top of the line Yggy and they both tend to sound more mellow and analog than my other options, also fed from an oppo 103. Use a coax cable. Still will not beat your analog. Never tried the Lexicon but I once had a very harsh Denon CD player that kept me in analog all through the 90s. Still there mostly.
gillatgh
:"@noble100,
Yes H/T setup is full blown, front, center, surrounds, sub 5.1 setup. Processor and 5 Ch 250 W amp, D class. (The Krell died)."


Hello gillatgh,

     Okay, a 5 Ch class D amp is excellent for my suggestion.  My suggestion may initially seem a bit extreme to you but it should result in an overall sound that is less harsh and bright.  Here it is:

A.  Remove your Lexicon MC12B from your system. My thinking is the  first check is to determine if the dac in this unit is the source of your brightness issue.  
B.  Substitute your Oppo 103 as your 5.1 surround processor. The Oppo 103 can decode all of the high-resolution audio codecs from Dolby and DTS, as well as uncompressed PCM found on some soundtracks.  This means you can connect most of the Oppo's surround channel outputs directly to your 5 Ch class D amp with the exception of the SW sub and the FR/FL front L/R mains outputs. 
      The Oppo uses the Cirrus Logic CS4382 dac chip to decode and output the lossless audio from its analog 7.1 Ch outputs (you'll just be connecting those for 5.1 and leave both side channels, 'SR' and 'SL', unconnected).  My thinking is that the Cirrus dac chip outputs will likely perform better than the older dac chip(s) used in the Lexicon.

The FR and FL outputs connect to the L/R rca inputs on your Rogue integrated and you use its front panel 'HT' control to choose between the 'HT/OUT' position for cd stereo music playback and the 'HT/IN' position  for ht playback.
The SBR and SBL outputs connect to your 5 Ch amp for the Surround Back L/R speakers, the SW output to your sub and the C output to your 5 Ch amp for the center ch speaker.

For video, connect an HDMI cable from your cable box to the 'HDMI INPUT' on the Oppo.  Connect another HDMI cable from the 'HDMI 2' output on the Oppo to your hdtv HDMI input. HDMI 2 will provide the best picture quality per the Oppo BDP-103 manual.
     This configuration should provide better, less harsh, sound for both cd and ht playback since the digital signals will be decoded by the Oppo's newer internal Cirrus Logic CS4382 dac chip rather then the assumed much older dac chip(s) used in the Lexicon.  
     Please try out this configuration and report back with results.

Thanks,
  Tim
@noble,
A very interesting suggestion. Also easily do-able as explained. Not really sure what it would do with sub integration but that's not the point here anyway.
I'll try this over the weekend as time permits.
Thank you for the suggestion. 
Hi gillatgh,

     Great.  If you have good results, I can explain how to configure the audio on the Oppo's on-screen audio setup menu.for 2 ch stereo playback if you play your music cds through the Oppo.  I can also explain how to integrate your sub for both music and ht playback, too.

Tim
@noble100,
That would be awesome. Much appreciated 
gillatgh
The Oppo is a pretty decent contraption.  My brother has the 105 and I noticed that it produced better sound in two channel than in 5.1.  There is some great Chi-Fi (eg Gustard X-26) running the latest ESS 9038 chip that could do you well in two channel.  You could use the Oppo as transport and the dedicated DAC for your two channell.  Also Okto will be putting out an 8 Channel that that has the best specs.  
https://www.oktoresearch.com/dac8pro.htm
I will be getting one.

Find yourself a nos dac Tube , some dac sound so digital which is a big turn off for long listen periods that not what you want , what you want is a analog sounding from your digital front end   I got a mhdt labs pagoda with balance and tube buffer sound very analog and natural   Hope that help 
Nobel100’s suggestion is the best/most comprehensive one given gillatgh’s current setup (I was only initially thinking 2Ch stereo, but you can test the system on all fronts with his suggestion).  You’ll also get the bass management and more up to date processing features.  I still have an Oppo UDP205 in my system for video processing and I recall some time back with one of the firmware upgrades that four digital filtering options were subsequently added for those using it as a CD transport (which I did for some time an was quite happy).  Not sure if this option was extended to the BDP103 (make sure you have the latest firmware version anyway).  Anxious to hear your results/conclusions. 
I don't have analog to compare to, but I had similar issues when starting to build my current digital system - harsh and bright - and had the same starting point with the Oppo 103 transport/DAC.  I did pretty much what has been suggested above - first I added an external DAC (used PS Audio Digilink III) which gave me more detail but didn't help with brightness.  Then replaced that with PS Audio Perfect Wave DAC and Bridge server, which quickly left the Oppo gathering dust, again more detail and better coherence top to bottom, but still some harshness/brightness.  (For me, one advantage of the PWD/Bridge was that it sidestepped the digital cable question, as ethernet is used to feed the DAC via the Bridge.)  Next worked on power cords and outlet - and that really helped tame some of the brightness (ended up with Cardas Clear M for DAC).  Isolating the DAC did not do much if anything.  Minimal room treatments helped, but I imagine this doesn't apply to your case bc your analog SQ is plenty pleasing.  Tried different driver tubes on amp, which also helped a little bit, maybe.  Have not tried speaker cables but after reading comment above re AQ cable now I might. 

Bottom line for me was that it took a variety of things to minimize the brightness, but in terms of equipment, getting a somewhat up-to-date DAC was the single biggest improvement from an equipment standpoint, making me believe that continuing to improve the source should be my priority. 

Luckily (or not?), I don't have a nice TT etc to compare it to, and since I was committed to digital I could justify $2000-$3000 (similar to cost of decent TT setup) for digital equipment.  Also most of the music I enjoy is available through Tidal, so I haven't had to burn too many files over to NAS.  
gormdane and gillatgh,

     I have an Oppo 105 and use a similar configuration with my combo 2ch and ht system.  I connect all of the 105's outputs directly to my amps (center, sub and rear surrounds via rca cables and the mains via xlr cables) and the sq and convenience are very good.
     My only reservation is that the 105 was specifically built as a step up in audio quality from the 103 even though they're both identical in video quality.  I know the 105 uses expensive Saber dac chips on all channels and the 103 uses Cirrus Logic dac chips on all channels.  The 105 has no harshness or brightness issues but I'm not as familiar with the 103's sq. and hope it's to gillatgh's liking. 
     Considering Oppo's commitment to high quality, I tend to doubt they'd use the Cirrus Logic dac chips in the 103 if it resulted in bright or harsh audio.  
     Since gillatgh's Rogue Pharoah integrated combines a tubed preamp section containing two long-plate 12AU7 tubes combined with a Hypex OEM class D amp section, I find it unusual that this combination would produce a sound that would be described as anywhere close to bright or harsh.  I've also never read any comments on the 103's sound as having a bright character on either cd or Blu-ray playback.
     Overall, I still expect the system configuration I suggested to provide a well balanced sound but, worst case if some brightness remains, there are some other options left to explore.

Tim
@noble100, some things I've tried so far trying to isolate the issue. 
1. At Oppo 103 Swapped digital IC from optical AQ to coaxial AQ Haweye which resulted in an increase of high frequency brightness using HT Lexicon. No change noticed using the Rogue.
Note: connection to Rogue is via analog out of Oppo where the Oppo internal DAC is doing the conversion. There is some hf brightness but not as pronounced. I think the Rogues tube section is attenuating the hf signal.
Also noted that this hf anomaly is isolated to digital only not an issue during analog playback. Also streaming from Spotify or Pandora directly from Smart TV seems to be no issue. However when using the Pandora app in the Oppo the brightness returns. I have yet to get to trying your suggestion as that will take more effort and time. 
Ps. The Lexicon processor has never exhibited this phenomenon prior to the Oppo introduction. 
A point I forgot to mention, playing back a DVD thru the Oppo (concert, both BR and standard) exhibit none of the hf issues encountered when playing Redbook CDs. My issue seems to be limited to CD playback. Playing DTS cds also do not exhibit any hf issues.
Very strange!
Hello gillatgh,

     Yes, it is a bit strange but it's not brain surgery, right? 
     I no longer believe the Lexicon MC12B is the source of your issue.  It seems, in your current setup, you only use its internal dac chips for ht processing and you use the 103 for cd playback connected directly to the Rogue.

    However, I'd still suggest removing it because it's unnecessary and using the 103 for surround decoding, and connecting its outputs directly to your 5 ch amp, will likely be a significant improvement for ht sound quality and it'll streamline your system to just the necessary gear.
     Once you get the time to reconfigure and setup the 103 as the 5.1 processor, there are some other features on the 103 you can explore. 
     Things like the audio processing setup screens where you set the size ('small' for sub assistance or 'large' for no sub assistance) and relative volume of each of the 5.1 channels, the cutoff frequency for bass sent to your sub and how you want 2ch stereo cds to be processed and outputted.  You could get a head-start on this by reading these sections in your 103 manual. 
     I'll monitor this thread and await updates.

Tim
      
 
@ noble100 and all that contributed,

Tim, in two words, YOU ROCK!!! 
Reconfigured my system as you recommended, also read the Oppo manual, with a slight change. Instead of using the Oppo as the preamp I kept the Lexicon in the loop. Configured as follows, removed the digital connection completely and connected the Oppo to Lexicon via analog out to 5.1 analog in connection on Lexicon and set Lexicon setting input to analog bypass so the Lexicon DAC is bypassed and processing is done by the Oppo. Only loss to this configuration is inability to convert 2Ch into Lexicon proprietary surround modes. Quite ok with that as I do have the ability to just change a setting if I want to use them.
Now for the result.........WOW no more harshness, brightness etc at high frequencies, open airy superb. Much more defined and clear. Extra bonus my SACD and DVD A disks now also play. I'm thrilled and really a happy listener.
Redbook CD'S are sounding great like never before. I may have to change my mind about digital. Analog still has what I'll just call some ambience that digital is missing but in the big picture the convenience of digital is a worthy contender.

Thanks to all who took time to make suggestions. All of you are superb music affectionados but Tim, noble100, absolutely had the best and most cost-effective solution. Great ideas and info.
My problem is solved. Again thanks to all.
Hello gillatgh,

     No problem I enjoy helping the humans.

     I'm glad you like your new setup.  When you have the time, don't forget to go to the Setup Menu and configure your 5.1 system for optimum performance.  

     Go to Setup/Audio Processing/Speaker Configuration.  Use your remote to scroll to the Test Tone box and then use the l/r arrows to select each of the 5 spkrs and the sub.  For each spkr you set the Size (Large for no sub assistance on the spkr Small for sub assistance) Distance (approximate feet the spkr is from your listening seat) Trim (spkr volume-you want all the speaker volumes about the same relative volume at your listening seat).  When completed, you can use the l/r arrows on the remote to sequentially play the test tone through each speaker and verify all channels have the same relative volume when at your listening seat, making small adjustments to Trim and/or Distance on each speaker til the test tone sounds equal from all the spkrs.

     You can also go to the Crossover section and set the frequency at or below which bass frequencies are sent to your sub.

     Probably best just to read the Oppo manual on this stuff, too.

     PM me if you need more help.

Enjoy,
 Tim
Enlightening Conversation. Thank You @Noble100 and your insight it will help me with my 103. BTW I use it occasionally with a PS AUDIO PWD and the Oppo sometimes sounds better without it. I love the OPPO and think it sounds and plays much better than its price point. With the OP's system he/she should have great sound from any music played. Finding where the problem is can be such fun. Not!  But when you do solve the mystery  the rewards are plentiful
I’m new to this thread.  OP, the last paragraph of your original post says it all; the DAC in your Lexicon is hardly state of the art.  Digital has advanced tremendously in the past several years.  With all due respect, all the other comments about power source, ICs, etc. are meaningless unless you improve that glaring deficiency.
  A DAC with HT bypass?  What’s your budget?  I haven’t looked for that feature myself but it shouldn’t be that hard to find.  Another option is to get a better processor with improved DAC; I recently upgraded a10 year old Onkyo AVR in my HT system with an Anthem MXT AVR, with room correction and playback with silver discs using an Oppo 203 as a transport is noticeably better.  Some of the improvement is due to Room correction, no doubt, but the improved DACs must be doing something ...
  to answer the question you pose...would an improved DAC be worth it...I would borrow a DAC (find an accommodating dealer, either on line or a store), plug it into the system, spin CDs for a few days, and make up your mind. Pick one that would be in your budget range.  If you like the improvement, go from there, and if you don’t, you are done
Hello firberger,

     Yes, all the Oppos are excellent and absolute bargains.  It's really a shame they decided to exit the Blu-ray market.  All high quality, very versatile gear with excellent support and customer service. 
     With the BDP-203 and 205 being their last units produced, I think all used Oppo models will be in high demand for years to come with corresponding increases in prices.

Tim
Wow..

A productive thread in which contributors genuinely assisted with the OP’s system concerns and doing so without the usual attitudes being expressed. 

Kudos, to civility!
Greetings celander,

On my planet, we refer to the humans as "Planet Poopers" but we’re still taught from when we’re newts to treat all the poop for brains species in the universe with respect and civility.

Tim