Does the Transport make a significant difference

11-21-14: Ricred1
What are the thoughts on removing the preamp and connecting the DAC straight to the amp?

As Charles and Rja indicated, this is best determined by trying it both ways. And before reaching any conclusions, you should preferably try both the balanced and the unbalanced connections which are supported by each of the three components.

FWIW, though, after looking at the specs and descriptions of the PW DAC II and your Parasound A-21 power amp, and measurements of your Aerial 7T speakers (the sensitivity of which will affect what part of the range of the volume control that is used), in this particular case I see no technical reason for a preamp to be necessary. Whether or not it would be subjectively preferable to include one is another question, of course.

FWIW, my own instinct in cases of doubt is to keep the signal path as simple as possible, by not including in it anything that has no clear basis to be included. And if that turns out to be the alternative that is less preferable from a subjective standpoint, to try to determine the reason, and to correct the issue by changing a component rather than by adding a component.

Good luck, however you decide to proceed. Regards,
-- Al

11-22-14: Ricred1
The Parasound P5 is a preamp with a DAC, but the PS Audio Perfectwave DAC 2, sounds significantly better. I don't have a problem with my DAC. I'm trying to find the best way forward. What is the better bang for the buck, new transport or preamp? Again, I want to spend 3-4K?

I would keep in mind the possibility that a "better" preamp might, by virtue of presumably being more transparent, bring the sound closer to what you did not like when you tried using no preamp. For that reason among others I suspect that a new transport is likely to be the better choice. Alternatively, I would also give serious consideration to Steve's (Audioengr's) suggestion of his reclocker. Although I have no experience with it, I have heard good reports about the benefits it has provided to at least one audiophile friend whose ears, opinions, and system I particularly respect.

Interestingly, also, I note the following statement about the PW DAC II at the PS Audio site:

It hasn’t escaped us that many of our customers rely on the PerfectWave DAC as their primary music source feeding a power amplifier directly. In fact, that is our preferred method of connection.

Just speculating, but perhaps you found inserting your preamp into the signal path to be preferable because its less than perfect transparency is masking the shortcomings of the NAD CDP you are using as a transport.

Regards,
-- Al

11-24-14: Ricred1
My other thought was add a JL Audio sub for now and down the road upgrade my source or preamp.

Since you indicated that your P5 preamp has been sold, I assume you are envisioning the possibility of driving your power amp with the balanced outputs of the PW DAC, and the sub with its unbalanced outputs. And as is usually the case with powered subs, the input impedance of the unbalanced line-level inputs of the JL subs is low, e.g., 10K for many or all of them, and IIRC most of them do not provide speaker level inputs.

Given that, before purchasing a sub I would suggest asking PS Audio if the balanced and unbalanced outputs of the DAC are independently buffered (i.e., driven from separate output stages). If they are not, adding the sub could very conceivably have adverse effects on the sonics you hear from your main speakers.

Regards,
-- Al