Theta Cassablanca 3 setup related question and request for input

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.

First, the CB3 does not have DIRAC room control.  I think it may be complicated to setup because the CB3 has all these different crossover points and crossover slopes/types.  If I remember right, you can actually set your subwoofer crossover frequency different than you rmain speakers, and use a completely differenct crossover type (such as Butterworth vs. Linkwitz-Riley).

Since the CB4 needs to support DIRAC room correction, they got rid of all that complex crossover options and just went with the industry standard where you set the crossover point for each speaker and anything under that point is automatically sent to the subwoofers.  The CB4 upgrade is primarily the DSP board and the HDMI 2.0 board (which support 4K passthrough).  The CB4 also supports DSP and DIRAC processing at 96khz (it even sends 96khz to the DAC boards).  The CB3 only support 48khz processing, if I remember right.  The CB4 supports all DAC boards compatible with the CB3.  The firmware on the DAC boards needs to be updated also to support CB4 DSP board.

The CB4a (new model) supports Dolby Atmos and the new Xtreme 3 DAC board, which has 6 output channels.  The CB4a supports up to 12 output channels.  It also supports HDR over 4K.

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As far as sound quality, it's all Theta sonic signature.  The Theta DSP does weird things to the waveforms when it processes in DSP.  I think they have some sort of waveform smoothing, which they rave about.  To me, the Theta sounds bright and sterile.  I don't know if it's this weird processing or the design of the DAC boards or what, but it's not my preference.