I may be missing something, but why don't you use the meridian? As long as you have a pass through on your pre, any processor can be used. Not sure what your question is.
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Cheapest solution is acurus act 3 with ABM for around $500 range used. There won't be any cleaner more dynamic sound for DD/DTS for the money! There's lower signal to noise pre's out there however, but the ACt 3's more than liveable, and a veritable steal! You definitely won't find anything more dynamic or clear and detailed sounding for anything south of $1200 used
James, you really dont want to pass your good 2 channel through a Pre/Pro. More direct is better. Thats why a lot of the newer 2 channel preamps have a pass throught built into them.
I would recommend looking for a 2 channel preamp which allows your Pre/Pro to pass through it. The Modwright seems to be getting some good reviews from fellow A'goners.
Or maybe you're looking for a CDP with volume (or plan on using attenuators) in which case, would complicate things. I still wouldnt want the 2 channel signal passing through the Processor, and another set of connections, and cables, etc.
Distortion, I think what he's trying to infer, is that he wants to use the "dirrect through" on the 2 channel preamp, thus looping and AV pre/pro through that input (2 channels worth for L/R) when he does multi-channel stuff. I think his wording is a bit contrary and confusing, but think that's what he means anyway...could be wrong.