Help with PowerMac G5 Leopard and iTunes

I need some help improving the sound coming out of my PowerMac G5 running OS X 10.5 Leopard (it cannot run Snow Leopard). Currently it is being employed as a DVR in my system, and I would really like to use it as a music source as well. The sound for video is acceptable (I don't have very high standards in that respect). The sound for music playback from iTunes however is quite bad, even though almost all of the music was ripped from CD's using Apple Lossless compression. Here is a description of my system and the problem:

The amplifier is a Music Hall Maven stereo receiver (I am not interested in surround sound). The receiver has analog, toslink digital and SPDIF digital inputs. Sources include the PowerMac, an OLD JVC DVD player with K2 circuitry, and a Panasonic DMR-E80H DVD Player/DVR. The PowerMac has a toslink digital output, and I also have a Behringer U-Control (UCA202) USB device that can output toslink digital. I am using a glass fiber toslink cable. The speakers are Dynaudio Audience 52SE's. I also have a pair of Energy Connoisseur C5's, but I much prefer the Dynaudios.

The best sound from the analog inputs comes from (this will surprise some of you) the JVC DVD player. Really, this player has a much better sound than any mid-priced CD player from its time. This was my previous standard.

I'll list the sound from the digital inputs in order from worst to best.

The worst sound comes from the toslink digital input directly from the powermac. I was expecting more from this, but there is a LOT of distortion and/or compression in the signal. It is quite likely that there is a lot of jitter in the signal that is the heart of the distortion.

If I connect the toslink to the USB connected Behringer U-Control the sound is just slightly better. This is a VERY inexpensive device and I did not expect a lot from it. It served another purpose, but was worth a try. Some of the perceived "improvement" may just be that the device seems to round off some of the detail, and so I am less annoyed by the sound than that which comes from the PowerMac digital output.

The best sound by far from the digital inputs comes from connecting the Panasonic DVD/DVR through toslink directly to the amp. This is the first source in my system that bested the sound of the analog inputs from the JVC. The sound is definitely better, but keeps the inconvenience of having to locate and play each CD separately. I should note that the sound is only good from the Panasonic if the hard drive in the unit is shut down. When the unit is recording (doing its DVR duties) the sound from the digital output is dreadful.

I do not have money to spend right now, but will be saving for future upgrades. Any suggestions on setting OS X 10.5 or iTunes to improve the sound would be appreciated. I have tried every setting I can find and have unchecked all of the sound shaping/compression I could find on the current iteration of iTunes. I have followed the development of the Benchmark DAC1 USB for several years and may go with this in the future, but other DAC suggestions are welcome.