Mark Levinson 326s vs BAT Rex Series 1 preamps

"That is what I thought. I have heard that the Bat Rex makes the Levinson stuff sound small and restricted. "

That's actually a really good way of putting it. There's nothing wrong with the Levinson. Its well made and sounds good, but sonically its very different than the BAT. Polite, smooth, refined, etc... The BAT creates a much broader and deeper soundstage, larger images, more detail, more dynamic contrast, etc... It all comes down to personal preference, but I can't see someone who bought a Rex and is happy with it, trade it for a 326. Its just too different. If you wanted to go SS and were considering an Ayre, or something similar, then that would make a lot more sense.

"I watch a lot of movies and like the idea of not burning 18 tubes in pass thru mode BUT what am I giving up sonically if I go to the 326s?"

You'll be giving up music. If you install the 326 in your system, within the first 10 seconds of listening you'll know that you made a huge mistake.