blu ray for 2 channel altec lansing horn system


I am attempting to incorporate 2 channel audio from blu ray movies into my system which is comprised of altec horn speakers and an SET amp - no preamp. The system sounds wonderful for CDs and LPs. I tried running coax from my blu ray player to my dac, but from what I understand that is not lossless audio and HDMI is required for that. I then tried an HTPC, which decoded the lossless audio and sent that to my dac via usb, but that required ripping the blu ray movies and i just want to pop in a disc and play. So i believe my only options are hdmi or analog outputs from a bluray player.  I don't believe there are many players with quality dacs/analog output stages - the oppo 205 was mentioned but is cost prohibitive on the used market.  The sony S500ES was mentioned and I was considering purchasing a used model and trying that.  The question I have is are there any AV processors - legacy or new -that have quality dacs and would integrate well with my system? I only need it for 2 channel decoding the lossless audio to pcm and converting pcm to analog  and would prefer not to use the preamp function.  Any thoughts would be greatly appreciated.     

majorc

I used an OPPO 80SE for a long time for watching movies using the stereo output, the onboard ESS DACs did a fine job for movies. Played through a tube amp and Edgarhorns. I actually used it for music for many years as well.

I tried both an active and passive preamp and to my ears the direct connection without either sounds much better.