Amp/Preamps vs. High end AV Receivers


Hi,
I am sure this topic had been discussed exhaustively. I am new to this arena looking for some help to upgrade my Onkyo AV Receiver (135 w/channel). I am debating whether to the AV route or the AMP/Preamp combo. Naturally, I understand that I get what I pay for.

Would appreciate some inputs and suggestions regarding:
1. AMP/PREAMP combo route - 
2. AV route

I am not looking at a huge budget but a decent one. 

Thanks in advance
128x128terrancej
@caphill I personally will not invest in a $4k receiver (i.e both AV processor and amp). And specially when there are no measurements for the amp section of the receiver. Why even bother. No one really know what they are getting. 

You are right it is pointless to consider $20k worth of electronics for B&W CM8. And I would venture and say considering one unit at $4k is also pointless.

One can get great amps for far less than $4k. And once you have a good amp one is free to upgrade AVR/Processor every few years. 

My Marantz SR7005 is not at all close to dedicated AMPs I have, even with really modest speakers i.e Paradigm Studio 40v3.

Unless there is space constraint or usability constraint an expensive AVR is just a giant waste of $$, buy an used last gen AVR for 30% of its cost if one must, IMHO. Good amps are keepers!. Pick a flavor tube class A / SS class A / AB / D/ G/ H and sticking with it, they are better value for the $$ over long term and quite a satisfying musical option.
I always like to get a mid level AVR that has analog pre-outs for plenty of channels, then add an separate power amp.  In the OP's case, that could be a 5-channel amp.  It will, however, cost some money for decent interconnects.  Like some others, I cannot see paying $4K for a high end AVR like that Rotel.  You can get a Denon AVR-X6400 for $1,500, and it has plenty of pre-outs.   Add an Emotiva A-5175 for $799, and you are up to $2,300.
Running a similar type setup.  Started upgrading a couple years ago to bring up the sound quality after a downsizing move created the need to compromise from a dedicated room which had 2 Bryston 4B SST amps and ML speakers.  I run a Denon x4300h in 7.1, Magnepan MMG, REL sub, NHT super 0 surrounds.  The Maggies needed more power so I built the Hypex NC400 amps.  Immediate improvement- dark, controlled, no heat in cabinet.  When I use HT mode all is great.  When I switch to vinyl (Rega P3 with Nag 110 cartridge and Parks Puffin pre), Spotify or CD's I put the receiver in pure direct mode and call it a day.  In my little world I couldn't be happier.  
I had an AVR but then went the separates route.  The overall sound is much better, but I don't need to rehash what others have said.  

I got a used 5 channel amp, and added it as an outboard amplifier.  The AVR has line level outputs, and I connected those to the amp.  The advantage of this type of setup is that you can use a cheaper AVR without much power, and you can use the separate amp to power  your speakers.  

Then, in my case, I later wanted to upgrade to support 4K video, and I was able to score a $1k Denon AVR on clearance for less than $600.  It has all the software support I could need for up to 9 channels, including Atmos.  And, I can use the built in amps for the Atmos speakers if I decide later to go that way.  

In your shoes, if your AVR has line output, then I would just get a separate amp.  If it does not, and doesn't meet your codec requirements, then you can get a nice amp for under $1k (I paid $600 for an older 150 wpc Adcom 5 channel amp), and a nice (lower power) AVR under $1k.  In the future, you can meet any software changes with a low cost AVR, and connect it to your nice power amp.  

This option is way better to me than upgrading to a $2k AVR because when you want to update the AVR, you also have to pay the cost of the amps... meaning another $2k investment.