Step Up or new Phono Preamp ??

My system is as follows: Basis 2001 Signature, Vector 1 arm, Grado Reference (High Output) Master (retail $800.00),
McIntosh C2200 phono & preamp, Ayre V5X amp & Maggies 3.6R.
I am getting the upgrade bug and seriously cosidering getting a Shelter 501 II but I will need to either add a Step Up as the C2200
can't drive a LO MC or get a new phone stage to add to the C2200,
which I love and am not parting with. I added NOS tubes to the C2200 and it sounds great with my SACD player as well as my Basis TT but believe I may get better sound with the Shelter 501. I guess what I'm really after is much better staging, and even though
the HO Grado is a very good cart. soundstaging is not one of its strong suits.
So do I get a step up and if so what do you recommend?
Do I get a new phono-I've looked a the Underwood modded PS
Audio GCPH but have not heard it anywhere.
I'd like to buy the cart & step up or new phono(which one do you
recommend) and spend no more than $2,200 and less spent
would be much better from the WAF perspective. I really like the
C2200 so a new add on phono stage would have to be very
highly recommended for me to consider. However, I've never
used a step up and am concerned about the not knowing much
about step ups.

ANY thoughts and recommendations would be most appreciated.Thank you very much !!

If you're in love with your Mac preamp do this:

Forget step up transformers. There are at least 6 to 8 other analog nuts I know of here on AgoN who will tell you the same thing, and for the same reason (which I'm not going into here, sorry.) Also, don't bother getting a low to medium output MC cartridge which will require a separate phono preamp -- primarily because your budget isn't emough to do justice to either one.

The sensible thing to do would be to get a high output MC cartridge that you can use right into your Mac. Many well-respected manufacturers of MC cartridges make high output versions. Either a van den Hul TWO or HO Frog would be excellent choices, and would only require you add appropriate loading resistors to the Mac phono preamp section to bring down the 47Kohm default phono input impedance (which is meant for MM cartridges) -- I'm sure there's a place on the circuit board to do that, or a tech can do it for you.

You'd be keeping it simple, optimize your TA and TT without overkill, and going directly into a really good phono section in your Mac. That's what I think.

Check the older posts. There was someone who was using a 501 with the P75 Dynavector active MC amp with great success using the special current circuit option. He seemed to have owned other more Zoot Capri carts and had great respect for the synergy between these two. Used P75's are currently running $300-400 on A'gon. Think it might be worth considering. I know I am.... Or maybe a Denon DL-103r with a LeBong Step-up. Check out the TNT moving coil transformer shoot-out test.
Enjoy your music!
Two very good recommendations given above. I'll add a third option which is a slight twist on both. If you do want to move toward LO MC's, you could take a phased approach. I would recommend skipping transformers and find a good phono stage with a well implemented active MC gain stage. Then pick up a Denon 103R for around $250. This should keep you within your budget and set you up if you can upgrade the cartridge in the future.
Dear Luvsmusic: I agree totally with the Nsgarch advise.

You have several choices for a better cartridge: the high output MC and other MM cartridges. You don't have to go for a low output MC cartridge to achieve top sound performance.

From the first one I recomended the Sumiko Blackbird, very fine quality sound reproducer. On the second group: Clearaudio, Goldring, Audio Technica, Linn, Shure, Musicmaker, etc.

You will have not only a great quality sound reproduction with these high output cartridges but you avoid the step up transformer use that always do a severe degradation to the critical cartridge signal.

Regards and enjoy the music.
Thanks very much Nsgarch, Jomoinc, Dan_ed and Raul. All of your ideas are great!!! I'm going to look into cost, etc with regard to
modding my Mac C2200 and adding a LO MC as well as check out some better carts with no new phono needed...such as a
Musicmaker. I do have a question however: Do any of you think a
Musicmaker or Blackbird is a better cart than my HO Grado Master in general, and specifically do any of you believe these soundstage a fair amount better than the Grado?? Thanks again to all of you!!
Please enjoy Your music !!!
I know the prevailing view is step ups bad, active gain good, the usual respondents are there like Raul and I would'nt claim to be as knowledgeable as they, but I get very good results with a step up in my phono stage.
In a sense I agree with the earlier respondents, if you like the Mac and whats not to like, get a quality HO MC or MM cartridge to match it. I agree with NSGARCH, whats wrong with a HO MC, there seems to be prevailing view that the lower output the better a cartridge and I suppose that fewer windings have theoretical advantages, but there are still many wonderful higher output cartridges.
If you want to go the medium or low output route, try and audition a step up. I tried and liked the EAR MC3, my own phono stage uses Lundahl transformers. Looking at the various discussion sites, the best current bet seems the Bent Audio units, compact, using excellent English transformers and easily user adjustable. I don't know if the manufacturers would lend you a Demo set. Be aware, you must audition before buying, external as opposed to built in step ups, are plagued by high noise levels in some cases. You need to try it first.
Hey another thing worth considering is to see if your existing tonearm cable is capable of passing any more information. Moving magnet, moving iron , moving coil, all have different requirements ie capacitance, resistance, loading issues into the various preamp or step up device used. You may have already done this but it never hurts to verify your existing cart / cable specs capacitance, resitance, loading etc. and then find the optimal range - receipe for your input device of choice. Possible changes or upgrade required for the phono cable and/or tonearm cable or maybe a separate phono stage should be considered for synergy / functionality before giving up on making what you already have more satisfying. "Check the foundation before the remodel, know your weaknesses and then built on a good base" I have learned from experience, now if I could only take my own advice....One of the old school "system matching" techniques was to get something hot to balance something cold or cool as opposed to trying to keep everything link in the chain neutral and "tone free". Have fun discovering which way you want to go... If your arm can handle it, maybe a London Decca Super Gold Cartridge...+7mv... I am thinking about one also....