Krell HTS 7.1 vs Denon AVR-X4300H


Trying to build a home theater system which can double as audiophile stereo, either 2 channel or 5 channel. 
Sound is more important for me than picture. 

ordered epson 5040ube
already got krell KAV500 amp
just placed an order for oppo 205 blue ray
have rel S5 sub
considering vienna acoustics 4 ohm speakers, mozart for front and haydn for rears, with center maestro

Need a home theater processor. Have a good offer on Krell HTS 7.1. (1000$) vs. Denon avr x4300h
What would be better for my setup. What are pros and cons of either preamp? I would use the devon as preamp for sound only as it doesn't have anything modern in terms of video. As I mentioned, music is very important to me. What would be a logical choice here? Any other suggestions for preamp and spearers are welcome, I'm new to this home theater stuff. Also, Dolby atoms is not important to me, my amp only has 5 channels, unless i can use denons amp in addition to my krell amp to add more speakers, not sure if this is possible. 

My current 2 channel audio system is Mcintosh ma6600 with mcd550 and vienna acoustics mozart, and I love the sound. 
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You said HTS 7.1 will limit me to the compressed formats, DTS etc. But what if I connect my OPPO with analog out to HTS 7.1 analog inputs. Will the HTS screw with uncompressed high def sound from the OPPO? How would this work? Do the benefits of HTS apply in this set up? 

Also, would it be possible to integrate krc3 into HTS home theater system? Would this make sense? Would KRC3 improve the preamp section for my 2 channel audio? 

Im thinking of directly connecting my OPPO video to my Epson projector via HDMI. Would I lose anything by doing that? What would be an advantage of using 4k processor in this situation? 

My vision is to have a home theater with Krell KAV500 amp, OPPO 205, Epson 5040ube, vienna acoustics speakers. I need to decide which pre-amp/processor to get. Krell krc3 is very visually appealing to me, and I would prefer to somehow integrate it into my home theater, whether I need it or not. It looks very nice with a matching amp. 

appreciate everyone's input 

The Oppo does have excellent video processing, so you would not lose anything by going directly to the projector.  I don't think any 4K processor/receiver would be better in this case.  The only thing that could be better than Oppo video processing is if you put in a Lumagen before the projector to do the processing and color correction.

You could certainly connect the 7.1 analog output from the Oppo to the 7.1 input on the HTS 7.1.  At this point, the Krell becomes a pure analog preamp (it won't mess with any analog-to-digital-to-analog conversion and you'd get the full resolution of any hi-res audio from the Oppo).  This would give you pretty good resolution.  Just make sure the 7.1 is in full working condition.  And keep in mind that the reliability of this older product may not be long.

The resolution of the KRC 3 is not going to be as good as the HTS 7.1.  If you went this choice, I would highly recommend having the KRC 3 recapped - using best quality capacitors available.  The KRC series was warmer with generally less resolution, as well as the KAV 500 amp.

The only reason to use a 2-channel preamp is if you didn't care about the quality of HT at all (in other words, HT is just something to watch movies on and takes much lower priority for sound quality).  In this case, you could use the left/right out of your Denon receiver to use on an input to the KRC 3 in pass-through mode.  Then use Denon receiver to power all other channels. 

" The only reason to use a 2-channel preamp is if you didn't care about the quality of HT at all (in other words, HT is just something to watch movies on and takes much lower priority for sound quality). "

I don't know if I would go that far. Generally speaking, 2 channel audio is much more demanding than HT audio. You can get away with lesser equipment for HT.
Can this be done: 

connect OPPO to KRC3 and HTS7.1 and then to krell KAV500? 
If so, how exactly would it work? Im having difficulty visualizing this. Would I need an extra amp for 2 channels? Extra speakers? Does this even make sense? 

I would really like to integrate KRC3 into my system. By the way, I do not have the Denon. I have to pick either denon or HTS7.1 or like some suggested marantz processor. 

On a separate note, what about really old Mcintosh processors, mx-119, mx132? etc. Are those any good for my use as Home theater and preamp for stereo? If I use oppo analog output into an old mx, would that be better than krell HTS7.1? I think prices are pretty close for those two. 
@sfall - yeah, totally understand.  My answer was under the assumption that he wanted to use both a 2-channel preamp with a HT Processor/Receiver.