Smooth sounding DAC?

Audio Note is a good bet. Be aware that with non-upsampling DAC's, you generally get smoothness at the expense of dynamics. The AN can be modded to improve dynamics to some extent as well as HF extension and clarity.

With upsamplers, you can have both worlds, great dynamics as well as smoothness.

I'll quote some specifics:

1) Perpetual Technologies P-3A with Turbomod - very analog-like
2) Birdland Odeon-lite with mods - very close to P-3A in performance

Nothing I have tried comes close to these, including Audio Aero, AN, Electrocompaniet and even Meitner

"Would you comment on why nonoversanpling DAC's suffer from diminished dynamics and softened transients."

Sure. Every CDP and DAC that I have examined (a lot of them) that is non-upsampler has either:

1) Filters on the analog stages that roll-off the HF
or
2) Compromised power supplies that limit dynamics, particularly at HF

Either one of these will eliminate the digital noise and/or the phasiness at HF, but at the expense of HF extension or dynamics or both. With an upsampler, you get both dynamics and HF extension without digital noise or phasiness.

I have modded a dAck! and even though it is not an upsampler, it is very nice indeed. Very extended, transparent, good imaging and good dynamics. Best I have heard as the price. Not a match for my upsampling reference DAC though. It is twice as expensive. Next I will be modding a Nixon TubeDAC and a Benchmark DAC1.

The only tube output DAC that I have heard that approaches vinyl is the Audio Note DAC4.1X with mods. Superb sound. Maybe the Nixon has this potential as well