Denon 5800 as preamp in "pure direct" mode?

I am trying to upgrade the two channel audio performance of my home theater. I have purchased a two channel amp (McCormack DNA-2 DLX)to connect to the pre-outs of my Denon 5800 receiver's front left and right speakers (Paradigm Ref. Studio 100's). I am wondering if anyone has an opinion of the Denon as a two channel preamp in the "pure direct" mode? Is this severly degrading signal quality? Would I benefit greatly from adding a proper preamp with a home theater pass through to my system?
Im going thru same dillema... What to do?
Im using a Yamaha 630 as a pre (It has 2 channel
bypass along with 6 channel bypass) with a Bel Canto
EVO6 amp(very high end). Im also using Analysis
plus wires (very high end)with mid of pack Infinity
speakers. It sounds REALLY good... BUT i know im just
barely scratching surface. Im in the process of buying
a new pre-amp/surround proccessor i have narrowed it
down too two... The EAD theatremaster 8000 and the Aragon
stage one. I can guarantee you will get hear a HUGE
difference with a quality pre or pre/surround processer.
I know what the Denon's and the Yamaha's sound like.
They have amazing features and value for price but
if you want high end sound you have to go extra..

I hope it helps you.. and good luck..
Is it severely degrading signal quality? No, but it can be improved upon. See my system. I thought it worthwhile to add the external preamp, even though the 5800 is still in the loop. For some reason, the power amp sounds better driven from the preamp than from the 5800. It probably has something to do with the power and pre-amp both running in balanced mode.

That said, if you try out some good cables, you might find you are happy enough with the sound that you don't need an external preamp.

If you are thinking about upgrading your speakers, I would do that first. It will make more of a difference than a preamp.
I have a Denon 5800, and pure-direct mode as an analog preamp is quite bad. The detail is considerably reduced, the highs are rolled off, and there is a bit of hash added to the high end. The internal DAC doesn't suffer the roll-off problem, but the analog inputs do. However, both the internal DAC and the analog inputs have hash added to the high end, which makes listening much less enjoyable.

I added the external amp (Bryston 4BST) to better drive my Maggie 3.6/Rs. It was a nice improvement -- not as "thin" sounding.

I had to go to a separate preamp, though (placette passive pre). The Denon is now totally out of the stereo chain, and is used only for HT.
I went through much of the same sort of dillema as you. Although my Surround receiver isn't up to the caliber of yours it suites my needs for movies adequately. I started by adding a Anthem MCA-20 amp at 225Wpc. Then I added a few Harmonic Technology cables. Then came a Musical Fidelity CD player (major improvement over the DVD used for CD). Then I added a Sonic Frontiers Line 1 preamp that has a SSP pass through. Lastly I added the Virtual Dynamics Audition cable package with a biwire configuration which truly iced the cake. I also have the Studio 100's and unless you are wealthy or hyper-critical probably won't want to change them once you hear what they can truly do. They just need a really good power amp to make them sing and good cabling to get all the power there. I may add a pair of Studio 20's or 40's down the road and seperate the 2 channel from the multichannel as I do get a bit of a ground loop from the pre and the SSP. As soon as I disconnect the SSP all noise is gone. But that's another kettle of fish. Good luck.
I solved my Denon dilemna by selling my receiver to a friend and reverted to using my old Parasound PSP 1500 AV preamp. It is a much nicer sounding unit and has a straight wire stereo direct featrure; nice unit. It does not have a phono preamp but I keep an inexpensive Creek phono preamp around when I need it. The Parasound PSP 1500 used is a great buy and has a six channel DB25 input so it can be used with any external six channel processor.