I don't like the sound of my system. Help please.

Throwing more money at something you don't like is a bad idea,IMHO. Maybe you can get someone to help you with proper setup of the system and your listening space.

What interconnects and speaker wires used?

I would be suspect of the combo of the ARC amp, Vandersteens, and room acoustics/speaker setup with SS digital source could tend towards the lean side of things but hard to say without knowing more.

For starters your ARC gear should be left on all the time for best sound. It can sound hard and thin until fully warmed up which can take up to 3 days for ARC solid state and hybrid preamps.

I have found ARC and Vandersteen to be a good match. However, my experience is not with the latest Vandersteens.

You should be able to warm up the sound by adjusting the REL.

Call John at the Audio Connection.

Also make sure speakers are hooked up properly in phase, ie red/+ to red/+, black/- to black/-, etc.

Something out of phase somewhere might account for what you describe. Speaker connections are most likely and easy to check and fix.

Also can we assume the Vandersteens and source electronics are all in good working order? IS there any noticeable distortion or more just the tonality is not meeting expectations?

Hopefully they are but only you could determine that for certain. The easy way if possible is to swap out one piece at a time and see if that makes a difference. I always like to keep a spare amp and pre-amp and an extra pair of decent speakers around to use for such things. A relatively inexpensive integrated amp with pre-out and power in connections, like a NAD or such, works well for this. You might even like the resulting sound better even if everything is working fine. That would be more of a judgement call at that point. If you buy something used and do not overpay, you can always resell and change as needed without a big financial hit until things work out.