Recommendations Needed: Upgrading from ARC CD-1

Elgordo is right on, your original description of your system's sound is an exact description of the Vandersteens, with a very small amount of influence from your amp and cdp. While an amp upgrade would make a definite improvement, it still will leave you with the Vandy sound, which is a nice sound on initial listening but ultimately annoying because you can't escape the inherent character of the speakers no matter what you do. They simply aren't neutral and you will drive yourself crazy if you try to fix this through component swapping. $3k will buy some really good speakers on the used market; try Merlin, Meadowlark, or Dunlavy. Good luck!

As one of the "Vandy-bashers" I have to reply to maxgain. I am not saying they are bad speakers, in fact they have a great many attributes, including good sound quality for the price, and many people are very happy with them. But there is no doubt in my mind and in many others' that they are "voiced" to sound a certain way: Mellow, warm, and cozy. Similar to the "classic" tube sound, and many people enjoy those particular colorations, as they are vastly preferable to harsh and cold if you have to choose. But if you are someone who values neutrality and is disturbed by any consistent coloration, even a warm and cozy one, you can never find happiness with a system that isn't neutral. And since the original poster sounds like he is hearing the same things I do when I listen to Vandys, I was only trying to help him remove the most obviously colored part of his system. That's the beauty of this hobby, everyone is entitle to enjoy the sound they like, and to modify their system until they get it!