Better 2-channel music

Phil, the 105 crushes the 103 in 2 channel quality. In my opinion, the 851 will easily beat out the 105. So, you will be jumping up multiple levels by buying a Cambridge.

I find that the weak point with Emotiva is their remote controls. Keep that one in mind. I'm using the UMC200 with an Oppo 105. I let the Oppo do all of the processing. The only thing the Emotiva does is 7.1 volume control and occasionally radio or other analogue stuff. The sound is great. The one really strong point with the 105 over the 103 is audio. Better processors and dedicated 2 channel out.
You could keep the marantz as your controller. It has a better remote than the emotiva. Upgrading to a 105 should solve the rest of your issues. They do should have a 30 day return policy if the 105 doesn't work out for you.

Come to Pittsburgh and I'll run my 105 direct into Mac amps or monoblock tube amps. Virtually any pre-amp we put into the chain will change the sound, usually for the better. Any quality pre will have a better volume control and add some gain as well. The Oppo has a volume for convenience but isn't touted as a preamp dvd.
The Oppo is phenomenal as an everything player and eliminates a ton of clutter.
Final note: Paul McGowan of PS Audio did a personal study last year and appeared to surprise himself that adding a pre-amp into the mix usually helped the system.

A-What do you feel you are missing with the 7007?
B-What is your tv quality-will you see the difference?
C-Have you compared using the 103 as a transport versus using the 103 to handle all audio/video? What do you like and why?
D-I think that audio, video and features are all a huge upgrade going from the 103 to 105. This is a lot less money of an upgrade than buying a $3500 processor.
You may need to spend so much money. If you feel you are missing something with 2 channel (which may be the case), a nice DAC or the Cambridge 850/1 would be an upgrade. I've played with the 850 a lot and it sounds better than my 105 or Schitt Bifrost in 2 channel. I wouldn't even ad my emotiva into this mix.

Phil,
I'm not sure I would buy an 851 new. A used 850 will sound great. Other things that pop into my head are mainly circling around overkill. If you are doing 2 channel through a Cambridge, an oppo 103 will do just fine for theater and save you a bundle. That's savings #1. Also, if you have a Cambridge and Oppo, there's really not much that you need out of the Marantz, is there? Just 5 channel volume and maybe different modes. The Emotiva mc200 or outlaw will do the same very nicely and do a darn good job of it. Savings #2.
I know that my Emotiva passes a pure audio signal through very clearly without any coloration. (the marantz 7007 may do this too?) So, I'd say both the Cambridge and/or Oppo could run audio direct mode. You won't need a 2 channel pre-amp. Savings #3.
Now that you have saved money, blow the whole load on a really killer multichannel amp. The Emotiva amps are nice and a great value but not in the class of Mac, Classe and some others in the $5k range.

So, where would I start if I were you? Buy a nice 2 channel CD or DAC-Cambridge is awesome. Try this on CD direct on the Marantz. After that, try borrowing pieces. I think you might be surprised where the upgrades will come from after that.

My theater: Emotiva UMC200, Oppo 105, Dishnetwork, Mac 5 channel amp, coincident speakers all around, velodyne sub and a sota table with sumo phono pre for analogue. I also run my laptop with foobar through a music fidelity for streaming. Don't forget nordost cabling and PS Audio conditioners.

The Mac adds a little warmth and perhaps some depth. The XPA is a ton of clean power for the money. In my system I need a warmer sound and really enjoy some serious depth to my music. But yes, it is expensive.
The XMC is a great piece and will do wonders for theater. Is it better than 103 and 7007 combo, I'm not sure? You need to try some borrowed pieces. The other option is to eventually but the xmc knowing that you have 30 days to return it. The return shipping is nothing compared to getting to test it.
Will the xmc beat the 851 for 2 channel? I really doubt it! I think the 851 run in direct mode through the 7007 will sound phenomenal. Great way to start. Take your time and one piece at a time.
Buy the XMC when you get a 4k tv...just my opinion.

I'll post pics of my new listening room later in the week. We just put in a heavily reinforced ceiling, some sound treatment and all new wiring. Painting it on Monday or Tuesday.

I have no clue. If I'm using my 105, it would go direct to the pre and direct to the amp. The oppo would do all of the processing. Ideally, the 2 marantz units should sound identical....but we know how those things go.