RUNNING POWERED SPEAKERS FROM AN IMAC

Actually the headphone jack on the iMac has rarely if ever been used prior to this

try a pair of headphones connected in that jack. is there still static?

or, it may be a faulty headphone jack on the imac...

Well, just tried my Momentums in the headphone jack - clear as a bell. Put the RCA/3/5mm cable back in with the powered speakers and the static is back.....could it be that my lovely Radio Shack cable is faulty???

Yes, it could be. Sounds like you diagnosed the problem :) Still look into that dragonfly. For the $, it's a solid improvement

Good, yes, it does seem as if you've isolated the problem to the Radio Shack cable. If you want to be sure that's the issue it might be worth it try a different cable, such as this one. The Monoprice cables are of excellent quality at reasonable prices and they ship the same day you order.

An external DAC would be the next step up and while I don't have any experience with the Dragonfly since I've always used the optical output on Macs, it has a great reputation.