Theta Cassablanca 3 setup related question and request for input

Regarding handyman's comments, it's kind of an unfair comparison, as the Calypso is a 2-channel stereo TUBE preamp.  You are not going to get the "organic" sound out of the Theta Casablanca.  Also, the Theta is not a true analog preamp.  All of the analog inputs are automatically converted to digital (A/D convertor) and then re-processed and reclocked for digital output. 

That being said, I also had the same experience that handyman had.  I actually bought an upgraded Casablanca IV with Xtreme DACs and the Dirac room control.  I could not get the thing to sound good.  Like handyman indicated, it had a very clinical and sterile sound to it and it wasn't really "full" sounding.  As far as Dirac, I also could never get it to sound good.  Some people love Dirac room control, but I am from the side that does not like room control.  Dirac did weird things to the phasing and caused the sound to be "in your head" like headphones instead of way out in front of you.  I could tame this by cutting back on the Dirac processing percentage and doing a multi-point microphone measurement, but it never sounded as good as with Dirac turned off.  Dirac also over-compensated some of the bass frequencies causing the subwoofer to peak at frequencies that were room nulls.  I discovered later that the only way to deal with bass problems is with tuned membrane bass traps.

I had an older Krell HTS 7.1 at the time and when I gave up on the Theta and went back to the Krell, it was like "god damn, this Krell sounds so good!!".  The Theta just did not "sing" like the Krell.  The HTS 7.1, and the S1200 that I own now, have the Krell fully discrete Class A analog circuits that are just magic, in my opinion.

The Krell Foundation is very good, but I don't know what it uses for analog circuits.  Based on the price and all the Krell descriptions, I will have to assume that it uses op amps at this point.

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Regarding the MiniDSP DDRC-88A Dirac Live processor that is a HDMI correction device.  The miniDSP will have to decode any Dolby Digital / DTS type data stream and then apply Dirac corrections to that.  It will then have to re-encode those audio channels back to Dolby Digital or just send 5.1 PCM on the output.  Either case, this is not optimum because it messes with the clocking of the audio data.  If you really need room correction, it is a solution.  But it is ultimately better to look at room acoustic treatments (panels / bass traps).

Oh, I was mistaken.  The DDRC-88a is an analog input / analog output processor. This means that all analog inputs will need to be converted to digital before Dirac processing. Then converted back to analog using lower quality DACs and analog stages. And it uses a garbage wall-wart switching power supply. It is, ultimately, going to degrade your sound quality further, but it will give you Dirac room control.

I initially thought you were talking about the nanoAVR DL product, which does Dirac Room correction at the HDMI level. However, further reading states that you cannot use Dolby Digital or DTS from your source (i.e. bluray / satellite / streamer). You have to configure your source to send PCM 5.1 or PCM 7.1 only, which is doable, but it is lower sound quality than Dolby Digital / DTS because of the audio clocking problems that occur with HDMI data interface.

Both my HTS 7.1 and my S1200 had modified/recapped power supplies.  These units use the Krell fully discrete Class A audio circuits and they both have shunt regulated power supplies.  The Class A circuits require a lot of current and It is my opinion these two units have undersized power supplies.  With stock units, you may find that these Krell processors sound rather thin/bright (lean bass with a sharp mids/highs).  There really isn't enough capacitance in the power supply to keep up with this and the audio circuits are starved as a result.  Increasing the power supply capacitance solves this problem.

The S1200 does not have ARES room correction.  However, it does have a Room EQ where you can apply up to 3 filters to each audio channel.  Several filters are available:  High Pass Filter, Low Pass Filter, Notch filter (like a conventional EQ), Low Shelf Filter, High Shelf Filter, Peaking Filter (parametric EQ).  I do not use EQ except for applying a Low Shelf filter at 25hz so that my subwoofer does not peak.

Another thing.  There is a known problem with many S1200 units where the DSP board has a hardware failure.  This can be shown as unstable audio when decoding Dolby/DTS from HDMI input and other things like DTS-HD bass management, loud beeps/clicks, loud static when changing video resolution formats, inability to decode Dolby Digital Plus, etc.  The solution is to send in the S1200 to Krell so that they can replace the DSP board with a new one.  I'm not sure about the cost of this as my unit was still under warranty.

If you are willing to solder in some large capacitors onto the S1200 power supply, then the S1200 will likely be the best sounding processor out there.  Of course, 4K and HDR are not supported. 

However, if you want 4K and HDR, the Foundation is likely one of the better sounding units.