I am not familiar with your ICs but DNM Reson ICs are a sure way to address the problem as you describe it.
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I'll second Kr4's reply. Assuming that the room is OK and that the speakers have enough space to breathe, my next step would be to try and listen to the speakers in another room/system. Take them over to a friend's house and plug 'em in.
So first step, check the room and speaker set up, second step, check the speakers. Then report back if the problem still exist.
Yeah, the room is a good place to start. Mattress foam from Walmart. Experiment behind, between or on the side walls from your speakers. I just put it on the back walls of the built-in bookshelves next to my speakers. It made a huge difference. Because of the difference, I had to reposition the speakers to make them disappear again.
Ae88925, your problem is a common one; introductory level systems often exhibit similar problems. I used a tremendous amount of affordable gear assembling rigs for about ten years, and a system at such a price point will always have serious shortcomings in terms of failure to reach one's ideal. In other words, one gets what they pay for, and at the level of such rigs one cannot achieve a pristine performance. You likely already know that, but it is a harsh reality of audiophilia which cannot be overlooked.
The Rotel gear that I have owned/used in the past is more Mid-Fi sonically than Hi-Fi; it's priced accordingly and performs accordingly. Paired with an $850 two way speaker with an 8" and tweet it will be lacking tremendously in terms of definition. I have always struggled with two way speakers with larger bass drivers and tweeters. It is quite evident that a LOT is missing in terms of the midrange when compared to a three-way speaker.
I am speaking in generalities, as there are stunning 2-way speakers and poorer 3-way speakers. But, in general, though it is likely that some coherence and clarity will suffer marginally with the addition of another crossover and true Midrange driver, still the opening up and increased revelation of the midrange is often worth going that route, imo.
You have conservatively built and voiced electronics, and speakers which do not take full advantage of the Midrange, so yes, what you are hearing IS fixable, but it will likely take a change of a large element of your rig. No other solution, including room treatment will resolve this.
Now, it is possible, but not very likely, that you have massive bass response muddying the rest of the speaker's performance. Again, this is very unlikely. Only if you were absolutely overwhelming the Mid/Upper freuqency response, with say a subwoofer, would I urge you to move to room treatment first. I'm not saying room treatment won't help; it would, but a speaker change will be far more influential.
I suggest looking into other speakers if you enjoy the Rotel components' all in all. Unless you are in an absolutely small room with no chance at going to a larger speaker, look for a true full range speaker with a dedicated midrange driver. You will be stunned by the revelation of the missing Mids.
My advice is not taking into account all the variables to make a top end system; this is a practical approach to resolving your desire for more Midrange. But, be careful; do not accept a diminishment in any area of speaker performance to obtain the Mids you want. Seek a huge gain in ALL the parameters of performance! There are dozens and dozens of levels of sound improvement above you, so do not be fooled into thinking that not much can be done.
Finally, what's "wrong" with your system is not any particular defect of any electronic device you have in your rig. It's "wrong" because it's not where you want the sound to be. Welcome to Audiophilia! I spent the better part of two decades chronically not happy with some aspect of the sound of my rigs. It simply takes a lot of money and effort to work out every imaginable issue with performance. I had to finally conclude that any rig I would build with economical gear would not satisfy me long term. I learned all this prior to reviewing, so there is no agenda to my comments other than trying to be direct and helpful.
You must ultimately determine if you will "climb the ladder" in terms of sound quality by investing more money into the rig. If you do not wish to, then I suggest you experiement with assorted used cables to tune the sound more to your liking. To that end, I have not used your particular cables, but in general the cabling I have used with silver OFC conductors has been more to the cool, leaner end of the spectrum, versus the copper conductors being more to the warm and fuller end of the spectrum. So, a casual observation suggests you may be able for the time being improve the richness of the sound quality with different cabling. :)
Thanks for all of the responses. I do need to improve the room as it has too many naked hard surfaces. I've also considered electrostatic speakers. I auditioned a set of Martin Logan ESLs that had very nice separation although I didn't have any of my own music with me at the time.
I also considered upgrading my cables to Clear Day Shotgun or Double Shotgun cables. These are both solid silver conductors.
I'm not familiar with your gear. One thing I'm thinking after seeing pictures of your speakers, would be to swap the left and right speakers. I'm mentioning this because of the offset tweeters. It doesn't cost anything to try this, so I figure give it a try.
If you listen to Martin Logan speakers, bring your own music, as it should help. I myself, and a lot of others find them to be lacking in dynamics, or something to do with the way they crossover their panels with their woofers. Of coarse, they still have a lot of happy owners though.