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...the question is how good is the sound generated by the D/A converters on the Blu-ray players? My experience with non-AVR D/A converters has been quite mixed, even though some have "good" names attached to them.
Looks like you've already done your homework and as you know, it would be impossible to make generalized statements, and often it often boils down to personal preference as well. In short, only you can decide what works for you.

Having said that, I'd venture to say that in most cases, lossless audio will beat the lossy tracks hands down, regardless of where the D/A conversion is done. YMMV.
 

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Glad to hear that things are working out for you.

While it's good that technology is trickling down and that lossless audio can be had for a fraction of their commanding price from just a few yrs ago it also implies that our investments on those hardware are depreciating faster than ever. I used to be more willing to invest in higher end equipment but my strategy has changed in the last few yrs - I now buy medium grade equipment and change them every few yrs instead.
 
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