Using iPod Classic as music server

I finally decided to organize my music on a "server" using an iPod Classic that I got as a hand-me-down from one of my grandsons. In order to replicate music as accurately as possible I'm ripping CDs using Apples lossless CODEC. My understanding of these formats like FLAC and ALAC is that accuracy of replication is 100% and I'm finding that playback using earphones or good buds at least, seems that that is so.

However, when playing through my system, although good, playback using the iPod is not the same as when the source is the CD player. The information seems complete and obviously better than compressed versions I've heard but resolution and detail in the upper frequencies seems to have been softened.

My ability to compare these two sources is straightforward because I can have the same track playing on both sources and A/B using the source selector on the preamp. Now il get to my question.

First I need to say that the present system performs extremely well for my listening tastes so I'm not questioning the existing components. However, there are at least the 2 new issues of concern; one is the quality of the CD transport in the computer and the other is the quality of the iPod playback. I don't mean to imply that the playback from the iPod is terrible. As a matter of fact, it sounds quite good but a little softer/warmer than I prefer for critical listening.

There must be a reason why dedicated music servers are expensive and I'm assuming it has to do with reproduction quality as with other components in a system. I've never seen one so don't even know the process(es) for downloading music to them but, for several reasons, I want to pursue the use of a digital server of some kind. I'm, therefore, asking for corrections of my assumptions as well as some guidance toward making an intelligent choice.

My present system is: Shanling S-100 CD player, Peachtree Audio Nova as a preamp, Peachtree Audio 220 amp and Martin Logan Odyssey speakers.
For the ipod classic you could use the Wadia 170i ipod dock that takes the digital out of the ipod to your favorite dac.
A big improvement over the ipod alone in my opinion.
For stand alone music server there are a lot of options,I use the Apple mac mini with external hard drive ,usb out to m2tech hiface usb to rca converter and then to dac.
I have used and recommend the Olive HD04 and HD06 units and Bryston BDP-1.
Sonos is another good choice ,work out of the box solution with great company back up.

I have heard digital playback from iPods, iPhones, Mac mini's and solid state server. I have compared directly to the CD on the same equipment and the. CD always sounds much better. I don't know why but it does. This is running through my DCS Puccini and a friends DCS Scarlatti stack. I don't know what the issue is but a big difference to me.

Perhaps something like the Bryston referenced above has a better transformer and components and that will make the difference.
playback using the iPod is not the same as when the source is the CD player.

I'm not sure what you are comparing. Playback from your computer vs. iPod?
Maybe the master clock in the CDP is superior to whatever is inside the iPod. The CD (or computer) is controlling jitter and possibly has a better DAC. Thus, better sound.
Are you using the 30 pin connector on the iPod or the headphone jack? You will get significantly better results using the 30 pin connector, but in my experience the DAC on the iPod cannot compete with a CD player. Something like the Wadia essentially turns the iPod into an external hard drive and should improve your listening experience. There is another product that I have seen on Music Direct that appears to do the same thing. I have never been curious enough to pull the trigger to see how they do.