I spoke with emmlabs this afternoon and they said the problem is an interaction between the Cactus layer of copy protection and the Philips software/hardware. They said two possible solutions: depending upon the software version of the CDSD, a more recent software update may correct the problem. Alternatively, they recommended removing the Cactus copy protection by burning a copy of the original CD using CDclone, which can remove the offending Cactus layer and do a direct bit to bit transfer of the music data. Unfortunately, this means that you have to duplicate your disc and use a CD-R which may be more prone to scratching etc.
I wait to hear back from emmlabs.