Best Speakers for small room under $3.5k

Thanks everyone for more great advice. Yes, I think I'll upgrade my interconnect cable for starters, and maybe get a couple of new powercords for the amps. I already have a PS Audio 300, so am hopeful that my power is pretty clean. I will think about upgrading the preamp soon - I'm definately lured by the thougth of trying some tubes - I'll keep my eyes open for something good on audiogon (perhaps a BAT or Conrad Johnson). However, the Bryston BP-20has served me very well - I upgraded from a preamp section of an Arcam 7 integrated amp and the difference was astounding (I was laughing out loud at the dramatic improvement). I guess that's what happens when one addresses the weak link in one's system. Cheers.

Outlier, I didn't mean buy some new interconnect. Just put the KCAG where the PBJ is now, and vice versa. It's a free switch. Just to see if it makes an improvement. If you find yourself craving some more warmth after that, then see if a dealer will lend you some copper interconnects. Maybe Tara Labs or Cardas. Perhaps you can get a fair distance without buying a new preamp. If not, look into a Conrad Johnson product if you feel like you want a lot of warmth. Try before you buy if possible, some people feel they have lost some detail, and end up unhappy. But for us tube lovers...

Outlier, try this, it will cost you nothing and is very revealing of what you really need. Don't listen to your system for 1 to 2 weeks. During this "no system" time try to listen to as much music as possbible (in the car, table radio, TV, etc.) Finally, on the day that you break down and can't go without the high-end audio fix any longer, spend an hour or so cleaning every audio connection, dress and isolate every power cord and interconnect, use a tape measure and perfectly align the speakers and then put your favorite piece of music on. Your system should sound "absolutely amazing". If not, then you need to make major changes -- a cable here and there won't cut it. You could easily spend two to three times what your present system is worth to truly improve the sound quality. If you're not prepared for such a wholesale change, then accept your fate, your system sounds really good and you are going to have to live with it. Life can be so cruel.

The best small speaker I've heard in this price range is Dynaudio Contour 1.3 SE. It sounded better than most $5000 floor standing speakers I've heard. If you decide to upgrade your speakers, you should listen to these before you purchase any others. You'll be amazed!!!

Trelja, thanks for the good advice on switching the KCAG interconnect to the DAC/Preamp link. The cable is actually a balanced (xls) one, so I can't do it. I'll have to get a new RCA. Cheers.