Sound is too thin. What to upgrade, add or remove?

I agree with some of the responses above that you might want to try to fix the "basics" 1st before spending big $$$ on component upgrades. I will also start with simple tweaks (if you have not done this already) for eg: clean all cable contacts with a good contact cleaner (Caig ProGold and DeOxit or Kontak) and then enhance it with Walker SST. My experience is after doing this, it is equal to a component upgrade. The music just opens up and became fuller minus the glare associated with digital playback. For approx. $100 it was money very well spend IMO.
Good luck.

Ipy, what is Walker SST? Thanks

I agree with everything above with one thing to add. Get your preamp off your cd player!! You have a potentially microphonic preamp with exposed tubes and handling low level signals and you have it sitting on a component that has moving parts and thus vibrates and also outputs digital hash and noise. I think you'll see an immdediate improvement by getting a real rack to keep your components seperate and isolated and also take care of speaker placement. Good luck you have great stuff, let it sing!

I agree, it looks like some room treatments would benefit you, as without them you are not hearing your rig's full potential. With parallel surfaces you have issues with phase cancellations and standing waves; corners are breeding grounds for bass buildup. Some absorptive material and bass trapping will give you more flexibility in speaker placement, cculd help with the WAF. Especially with your budget, you could look into some treatment solutions that are functional but aesthetically pleasing--WAF.

Have you experimented with differnt types of isolation platforms for your components?

Nice system BTW!

Thanks everyone, thanks for the suggestions. I will try n work with speaker-placement first before going further; however, there is limited scope of moving the speakers closer together unless I move them forward enough to clear the credenza and then partially put them in front of the credenza; this could potentially have a PAF (see Ozfly’s note for explanation) factor. I will see what is workable on this front. The speakers are not toed in as per Kharma's manual, and if I recall correctly, they’re about 7-ft & change apart (woofer-to-woofer) now. According to the manual the speakers should have a clearance of 4-ft to the back wall – I think I have a little over half of that. The ceiling height 10.5-ft could be another issue, not to mention the bowling alley like floors (actually bamboo). The wall on the opposite side of room (opposite from stereo) is also far away, say about 22-ft. So yes, I agree with you all, the “room conditioning” is the weakest link in this setup. The problem however is, the room has to double as our living room and therefore, audiophile type commercial grade conditioning panels may not work for this application. I have to resort something a bit more clever - for now cork based modern art comes to mind :-) No really, you've given me plenty to keep myself away from bars for days. Thanks again.