Ken,
I have lols of experience with the SP-10, LS5 II and III as well as comparing these to the Ref1 which was quite a disappointment .... you would think such a higher priced model would bring on even greater refinements but it simply was not there.
As I understand from going to the ARC dealer back in 97 to hear my then II vs the newer III, the III was a result of the efforts of the Ref1. But time after time, at the dealer and at another person's house who had the Ref1 and and LS5 III on loan, the LS5 III just had more emotional impact. And it had incredible resolution as did the Ref1.
The II vs III comparison at the dealer made it very clear the II had greater resolution. I remember hearing subtle differences in a singer's tone with the III that were hard to hear with the II. And the III had a more coherent tonal balance while the II tended to bring the upper freqs a little more forward. But the sonic signatures were much the same. This was 97.
In 2001, I contacted a local (Minneapolis) audiophile who was selling his III. I had the II at this time. He brought the III over. We let the units warm up for an hour or so and switched back and forth. The exaggerated sibilance of the II became apparent...almost to a point of an annoyance once the smooth and natural top end of the III had been heard. The II did seem to have a little more extension and definition in the extreme lower frequencies. The mids were virtually identical....that awesome LS5 and SP-10 signature. I ultimatel bought his III and sold my II.
The $1500 that ARC charged for II to III upgrades back in the late 90s I simply could not justify. But today, the price difference tends to be $500 on the used market which I think is a great value. But with II's going for $1700-1800 these days, there is no other value in an ARC line stage that comes close. Don't even bother with the 15, 16, 22 as none of these have the magical ambience and harmonic richness quality of the LS5.
I have since changed to the BAT 31SE which had a whole slew of refinements over the LS5 III. But I will always remember the LS5/PH2 as the greatest value in a preamp that I ever owned.
The other product that you may want to listen to is the BAT VK5i. I never had a chance to A/B this with the LS5 but always wanted to.
John