Dac - Preamp connection problems

I recently purchased a Wadia 170i - Aracm Rdac combination both of which seem to be in working condition. I have connected the 170i to the Rdac with an coax digital cable. The Rdac is connected to the aux input of a Mcintosh C27 via rca. When I play music in the ipod I get no sound from my speakers. Upon troubleshooting I discovered the following:
1. Swtiched the connection to the C27 from aux to phono. The sound is very bloated but at least I can hear something. This eliminates any issue with the rca cable. This also confirms the the 170 is feeding the signal to the rdac.
2. Hooked up my macbook pro via usb to the rdac and into the phono input of C27. The sound is slightly better but definitely not acceptable. This confirms that the usb input is also functional and the dac is doing something.
3. Keeping my macbook connected, I switched from phono to aux back again on the C27. I didn't hear anything but then I turned the volume all the way up and I got the sound to show up. The sound was terrific. Crystal clear and crisp, however the volume was barely sufficient to listen to and I was maxed out on the volume control on the preamp.
4. I switched back to the wadia by switching over to the coax input on the rdac and got no sound despite the volume being at max.

I am stumped. Is there a limitation on the C27 or is there something else that I am not doing correctly? Any tips/help are appreciated. I am going to try to hook the setup to an av receiver tonight and see if that makes a difference?
Thanks