External DAC for PS3

Of course you could.

The question is whether you'll really get $1K to 1.2K (cost of the Benchmark) worth of improvement over plugging the PS3's analog stereo outputs directly into your Linn system.

I think high end cd players are highly over rated. I just laugh anymore at these crazy prices some poeple pay. Its 2008, you think it takes $10k to get top knotch cd sound?

No.... bad idea. It does not give a good sound. Don't know about the Benchmark though cos I am using the Bel Canto DAC3 which is supposedly rated higher than the Benchmark. The sound lacks any form of richness whatsoever with cds. Even Blu-ray sounds lacklustered through it so I only use it for gaming now.
No idea why since re-clocking should have solved of the problems.

That does not seem correct. Have you checked your settings in your PS3? I don't have a PS3 but there are several sound options on my Sony Blu-ray player of which one includes downmixing. I found that it was necessary to get the settings correct or else the Sony BD player did indeed mess up the sound (for example movies came out as stereo).

You are correct that "re-clocking should have solved of the problems." So I would suspect something else. One possibility is that the PS3 being a high powered computer might be inducing a lot of noise on your AC power (switched mode power supplies are notorious) and this might affect the DAC through its own power supply.

FWIW I use a power conditioner and keep my computer equipment well away from the audio gear (on a separate conditioner in a separate wall socket).