A further report on the Denon DCD 1600NE:
Jafant, you are correct. After six more weeks of break-in, the Denon has improved. Not dramatically, but audibly. Particularly, the top end sound less "digital" and more natural. While I'm still not in love with the Denon, I like it more than I did. My wife, an experienced classical musician and former recording artist, feels the same.
The biggest improvement to this system, however, has been the addition of a pair of Sonus Faber Olympica III speakers. After auditioning Focal Kanta No. 2, SF Olympica Nova II, and Wilsons (forgot the model), the Olympica IIIs were the clear winners, with an organic, non-fatiguing sound that serves the human voice, solo instruments, and full orchestra equally well, and invites long listening sessions.
I'm now awaiting the delivery of new speaker cables, and I expect to take further steps to upgrade as time progresses.
Audiogon has been a valuable resource in this process. Thank you for your contributions.