Speaker upgrade?

you have several paths to improve the sound, but starting with the speakers is always a solid approach. I would look at what you really want in a speaker, more sensitivity, presence, midrange, tweeter quality, soundstage etc.  If you want the best bang for the buck, for $650, depending on your room size, you could get used:

https://speakerchoices.com/?pricemin=1000&pricemax=2000 

Subwoofer. Easy peasy.

I agree the Kenwood pre amp is not ideal to say the least. Just wanted to see how it sounds. I’ll try to run source direct to power amp also. 

Really think you should look into used Revel instead.  Step up to something made 8n the last 10 years.  Also worth considering are JBL classic and klipsch heresy

Any way you can run the source direct to power amp and take the crappy preamp out of the equation? I think there are input level controls on the rear of the Parasound. Just to test. Then get a better modern preamp if there's an improvement in sound quality. 

I am going to use a Kenwood C2 preamp

If you can find the original Paradigm Studio Monitors they are really impressive especially in the bass. The old Stereophile review is BS in my opinion, the low bass and mid bass is Strong but not slow and it’s impactful. Mids and highs are very neutral and the tweeter is pretty darn detailed and not in your face.  Very full sounding speaker. Just need a good hundred watts of mid to high current amplification.

I am going to use a Kenwood C2 preamp instead do the HK and see how that sounds. Also waiting on a APT Holman preamp to get refurbished. Thanks

Any way you can take the HK out of the equation? 

Swapping those speakers would likely be lateral at best.  If you are still pleased with the sound of the Kefs how about adding a subwoofer?  This will likely be the best bang for the buck.  Good luck and cheers.

I heard the Stratus Golds many years ago. I was not impressed. I would say it’s probably a lateral move at best.