Should a dac run hot??

Cerrot - Red light and hot - yes it is puzzling. Internaly AKM chip detects non-pcm stream and turns off processing. It should get cooler if anything - strange. I will check Benchmark's forum - maybe there is an explanation for that.

Cerrot - Benchmark gets hot when you place something on the top of it or enclose it otherwise. My Benchmark, sitting on the open shelf, is luke-warm.

Harnellt - Wadia is on the expensive side and you would probably like to keep it for a long time. The only perishable item, I know of, is electrolytic capacitor. Its life is temperature dependant and it shortens by half for each 10 deg C (18 deg F) temperature increase. The only way that unit (DAC) can dissipate temperature is thru air convection. If temperature is too high it means that convection is too low. Increase it by removing it from enclosed space, by increasing space around it and finally by using very small quiet fan. Tiny slow moving fan should be plenty - anything is better than free air convection.

Harnellt - I assume you talking about power transformer. Typical failure is caused by overheating and in effect destroying enamel on the wire causing shorted turn. Shorted turn heats up and wire melts interupting current flow. Why you suspect transformer?