Parasound A21 question - can I use both balanced and unbalanced input on the amp?

tls49 and almarg, sorry I just now read your responses. Using an analog-to-digital adapter is a great suggestion. I think it should solve the problem very nicely. And I agree with almarg that even if there's some degradation of SQ while watching movies, it's not a big deal for me. Eventually, I might just buy a newer AVR that supports digital pre-outs.

So if I understand it correctly, the setup will be something like this?

AVR (RCA pre-out)--> Adatper --> 851D (optical input)
851D (balanced out) --> A21 (balanced input)

By the way, I'm still a bit confused about Richard's response. I am, in fact, only planning to use either the AVR or the 851D at a given time. So when listening to music, the AVR would be off and the 851D would be on, and vice versa for movies.

Is there something I'm misinterpreting in Richard's email?

Thanks for the suggestions. Based on dbphd’s suggestion, I emailed Richard Schram. At first I got an automated reply saying that Parasound is closed until Jan 3, so expect a delay in response. But after a few hours, I was pleasantly surprised to see an email from Richard. This is pretty freaking unbelievable. Wow, now that’s what I call customer care.

Here’s an excerpt from his email:

The Bal-Unbal switch on the A 21 isn’t actually an input selector. Its purpose is to optimize the signal to noise ratio for each type of input. If you leave the switch in the Bal position you can most likely leave both the 851D and AVR connected at the same time. It should work ok if you simply switch off the unit you aren’t using. However, since you’re probably using your 851D with the AVR you don’t have the option of switching the 851D off and you’d hear the player both via the A 21’s XLR input and the AVR pre out via the A 21’s RCA input. This wouldn’t damage the A 21 but I don’t think you would get the results you want.
I just briefly looked on the internet for a simple switch box which accepts XLR and RCA inputs and I didn’t find exactly what you need that wouldn’t degrade the signal quality. I’m sorry we’ll lose you as a customer.

almarg, thanks for the detailed explanation. I didn't realize the impact of impedance even when the unit is turned off. I looked at a few other adapters on amazon but it seems that the Gefen recommended by tls49 is a better choice. It's a bit more expensive but looks to offer more in way of quality and has decent reviews. 

However, having said that, I am now in two minds whether to just stick with the Parasound P5 and return the Cambridge 851D to AudioAdvisor as I'm still within the 30 day return period. I only bought the 851D thinking that the DAC is considered to be much better than the one in the P5. Since I mainly stream my music, it made a lot of sense. But the HT bypass, bass management and tone controls on the P5 are features that are quite useful. I don't know if improvement in the DAC quality is worth losing the other features of the P5. Tough decision.