I don't know anything about your audioengine, you might want to try an Istreamer DAC - link below - it is specifically made for connecting an Ipod to. I have one that I use in my headphone system and it is worth the money in sound quality to my ears. You'd bypass the receiver and go straight from the istreamer dac to your preamp
http://www.hirestech.com/product/?pid=87
http://www.hirestech.com/product/?pid=87