David - the most important thing in ANY digital audio system is the master clock(s), whether it is Squeezebox, CD transport or USB interface, even more important than the DAC design. If you are ever to eliminate this grainy, raspy sound, you will need a better master clock. Just buying another DAC will probably not cut it. The DAC you have is probably fine if it is driven from a low-jitter source.
It is possible to get analog sound from digital:
http://www.stereophile.com/content/empirical-audio
Steve N.
Empirical Audio
It is possible to get analog sound from digital:
http://www.stereophile.com/content/empirical-audio
Steve N.
Empirical Audio