On the Fence with Analog Vs. Digital. Need Help

Out of the blue I've been considering switching to vinyl. Most likely the reason for this is that my digital source is only an NAD T532 DVD player (ran into 2 NAD C 272 amps, NAD C162 Preamp or Adcom GFP-750 Preamp, Paradigm Studio 60 v3). The sound to me has been relatively harsh and just does not sound natural. My friend also let me borrow his Cambridge Audio Acur D540 player; it has its strengths against the T532, but can still sound bright and edgy. Granted neither of these players are ones to base a good overall analysis of digital sound reproduction on, the prospect of smooth fully analog sound is interesting to me. I've heard LPs before, but only on sub-par playback systems where the albums sounded grainy. So now the question is: do I spend $500 on a new Music Hall MMF-5 turntable and start investing in an entirely new music collection (I own about 3 LPs) to get this smooth sound that I am seeking, or is there a modestly priced CD player or external DAC out there that can achieve a smooth, lifelike sound with my current set up?

I've considered going with an external DAC and a computer-based album storage solution, but from what I've been reading and from what I've noticed listening to more expensive CD players ($3000+), it seems as though you really need to get up around that price range before digital begins to sound smoother and more analog. Right now I don't have $3000 to drop on a DAC/CD Player; it's a little easier to come up with the $500 for the Music Hall and gradually build the LP collection. So that's my dilema. I'm so close to saying "screw digital" and just taking the plunge. I might like, I might hate. Who knows.