Oppo 980H DVD Player for CD use only

Just connected an Oppo 980H and I am getting some STRANGE effects. I bought the Oppo for its ability to play SACD and HDCD, plus reviews that say it is good with standard redbook.

I've been doing A/B comparison with:
1) the straight Oppo,
2) the Oppo through my Valab Terdak (which is non-oversampling),
3) a Sony C69ES (which sounds astonishingly similar the Teradak - never heard two players so close!)
4) a Denon DCM-440.

The first thing I did was determine that the Denon was not up to par (my taste) with the Sony or the Terdak, so it is out.

When playing redbook CDs (Dave Matthews Some Devil) with the Oppo through the DAC, it sounds as I expect it to. Virtually indistinguishable from the Sony ES. This is where is gets weird. When I play the straight Oppo the sound volume seems to fluctuate for different instruments (or voice) at different times. It is like someone is playing with the mixing board and randomly taking various elements up and down. Instruments "open up" then "close down." Makes me almost dizzy!

This is accompanied by an incredible "spreading" of the sound stage. Whereas the Sony and the DAC make my speakers disappear by "centering" things, the Oppo leaves the voice where it belongs (centered), but pushes much of the sound back out to the wings for a stage that is even wider than the speakers. (Forgive my lack of correct terminology for these effects.)

When I turn up the volume fluctuations become less noticeable.

It is almost like there is an "exponential" effect to the volume, louder sounds get over-amplified and quieter sounds get shut down altogether. And on some songs the effect is much less pronounced.

I am using Celestion Ditton 66 speakers, a Carver pre-amp, and a Hafler DH-500 AMP (just completely restored with all new caps etc.) I repeated the test briefly using my Jolida 302B tube amp and Klipsch Heresy, and got the same wacky fluctuations, so it is something about the Oppo.

The Oppo is in very nice shape, with the remote etc. Since it is fine with the DAC, the Oppo transport must be working fine. Could it have something to do with the 7.1 settings in the Oppo? Something I need to turn off (or on?) I have my analog interconnects running from the L&R "front" output on the Oppo.

Thanks for input!

If you are playing only 2 channel recordings, you should be sure that the Oppo is set up to know you have only 2 speakers and is not set to reprocess stereo into multichannel. It's all in the manual. Also, try the regular stereo output jacks instead of the mch ones. (Why?)

Also, as you may know, you cannot feed SACD into your external DAC.
I would connect it to a television and check all the settings. I have the 980H and I believe you can set gains, crossovers, tone control, etc., from within the menus. Make sure there's not something funky going on there.