Looking for Better Jitter Reduction in a DAC

I am not talking about absolute levels, but relative ones, i.e. a mismatch between output level of the source and input sensitivity of the amp. Pro audio is very good with a properly matching gain structure, but home hifi is often not. I agree about XLR.

I do indeed think you may well have a gain mismatch between the DAC and the amplifier. What you described is precisely how this would sound like: clipping of louder passages.
Part of the traditional criticism of digital comes from precisely this, as the 2V output for cd players as specified in the Red Book was too high for many amplifiers of the day. Hence Quad after the introduction of CD produced a special input board for their existing amplifiers. These days, there are still many amplifiers that cannot quite handle this signal level. In your case, the situation is aggravated because your DAC has a 2.8V output (what is your amplifier’s input sensitivity?). A telltale sign would be that you do not have to open the volume control very much to get a loud signal. Now you may ask why manufacturers would specify a DAC or CD player with an output level that is too high, or amplifiers with a high input sensitivity. The answer is that the human brain interprets louder as better. So in a demo room, the louder player/DAC or the more sensitive amplifier will always be interpreted as the better.
So how do you find out if this is the case (after all, the problem may be different from what I suggest, mine is only an hypothesis)? The first test is the volume control setting. If this suggests that you may have a gain mismatch issue, there are two options. The technical one is to have a look with a scope. Such clipping is easily visible. The second is to use a clean test tone and raise the volume until you hear trouble. The third one is to insert inline attenuators, and see if that improves the situation. If it does, you also have your (fortunately very cheap) solution.
See here for some demo material and discussion: http://www.harbeth.co.uk/usergroup/forum/the-science-of-audio/amplifier-matching-mismatching-and-cli...

So:
1 problem also exists with other speakers
2 problem disappears using sources with lower output levels
3 already powerful signal with VC at 8 or 9 o’clock
4 problem disappears when pre amp is out of the chain.

4 has the greatest practical importance. For those who want to know the cause of the problem, I think it is now almost certain that the input of the pre amplifier was clipping because the input sensitivity was too high/ the source too hot. If this analysis is indeed correct, and if you want to keep your pre amplifier in the chain, all you need to do is replace the 6 dB pad with a 12 or even 18 dB pad.
You may wel have stumbled on what I think was the reason digital had/has a bad reputation. It was not the quality of the signal, but the gain mismatch between the players’ output and the amplifiers that people were using. Are you happy with the sound you are using now?
I am not quite sure what your current gear does or does not do, but an outboard volume control (passive amplifier by an inappropriate name) could be useful, and if not for you maybe for others. Here is one: http://www.tcelectronic.com/level-pilot/

Hi Shadorne,
That is absolutely right, but the sad thing is that there are many consumer audio products that suffer from this issue. You use pro audio grade gear, and there gain matching is taken very seriously - and quite rightly so. In the old days designers like Peter Walker vary carefully tried to find the sweet spot between too much gain with clipping as a result, and too little, but excessive noise as a result.
Let's indeed hope that this did solve the problem, and that the OP can stop worrying about all kinds of imaginary issues.

Well, maybe it is your DAC. A cheap test on that score would be to buy a Chromecast Audio and use its inbuilt DAC for analogue output. It will give you a convenient streaming device in the bargain. The inbuilt DAC is by no means harsh. It has two analogue output levels, one is called high dynamic range. That name is a bit misleading because it is just a higher (2.0V) output level. I would avoid it in your case. The normal one is about 1.2V if I remember well. Once you are done with the testing, you can use the Chromecast's digital (optical) output into a better DAC.

It is a bit hard to figure out from this end, of course. I still think you may have a gain mismatch (2.8V into a power amp with a 1.0V sensitivity). It does depend a bit on the design of the amplifier's gain control. Does it come after an input stage? If so, that input stage could still be driven into clipping. A cheap experiment would be to get some inline attenuators from Parts Express: https://www.parts-express.com/harrison-labs-12-db-rca-line-level-audio-attenuator-pair--266-244
Short of using a scope to inspect the signal, you could also listen to a cd with different levels of a test signal, and listen if and when the sound starts to distort.
Alternatively, what you hear with the digital source may in fact be perfectly fine, but unusual for your ears. You hear a difference with your analogue sources, but why would they be superior? Go to a live concert of a symphony orchestra and you will at times hear the pretty harsh sound that some would call 'digital', but that is just the real thing. Do not forget that FM radio is seriously challenged sonically, with high levels of distortion, reduced high frequency response, and limited channel separation. The same is true for vinyl. Both may sound nice and warm, but it is not quite the real thing.