I use a Toslink cable, (Toslink to mini stereo) to connect my Macbook Pro to my DL III with good results. The Toslink and Coax on the DL III will accept 96/24 files whereas the USB only acepts 44/16 (standard Redbook Audio).
Invest in a decent Toslink cable. I'm using a Wireworld Super Nova 6 which sounds decent (the Toslink connector is all plastic and I wish that it was a little better made and more durable).
Also, have you tried 'Decibel' FLAC player for the Mac? I liked it better than Pure Music and it is a good bit cheaper. However, I am playing mostly 96/24 files downloaded from HDTracks.com. I don't interface or play files from iTunes generally.
Invest in a decent Toslink cable. I'm using a Wireworld Super Nova 6 which sounds decent (the Toslink connector is all plastic and I wish that it was a little better made and more durable).
Also, have you tried 'Decibel' FLAC player for the Mac? I liked it better than Pure Music and it is a good bit cheaper. However, I am playing mostly 96/24 files downloaded from HDTracks.com. I don't interface or play files from iTunes generally.