HDCD FLAC FOOBAR SPDIF Cary 303/200 HDCD

I'm definitely not as knowledgeable as the other posters, but I'm thinking that once HDCD encoding is taken care of by foobar, then the DAC should not "know about it" and the HDCD light not coming up is correct.
The Cary is now fed a 20 bit word PCM stream, "synthesized" by foobar from a 16 bit, HDCD-encoded stream, from which the HDCD "marker" has been removed.

Here is some more explanation of the HDCD encoders in foobar (and other software implementatons) and why it is not as good as the original hardware implementation. The 16 to 20 bit extensions are done, but the digital filters are not implemented in the software versions. The Cary 303/200 has the original Pacific Microsonics chip, so should be better than the software implementations.

From the person who wrote the HDCD decoder in foobar "only gain and peak extension are applied. Transient filter is not supported, as there is no reference software to base the filter on. Besides which, the transient filter is really only useful if you're also upsampling the output to 88200Hz, or at least so I've heard." Quote from hyrogenaudio thread, post 97 of this thread

foobar HDCD discussion on hydrogenaudio

From Goodwins High End website

"Every CD player has a digital filter that is an integral part of its sound reproduction electronics. In addition to decoding HDCD recordings, the HDCD decoder chip used in consumer products also contains the HDCD high-precision digital filter that improves the sound quality of all types of digital audio recordings."

I think that cary 303 and the 306 doesn't decode HDCD via it's digital input. But to be sure, please check the user manual or contact the manufacturer.

dbpoweramp has an add on DSP that allows you to rip HDCD to 20 bit format file. Use that for ripping and you don't need HDCD decoding in the DAC. Its what I do with all of my Reference Recording CD's.

David256 - read my comments above. dBpoweramp uses the same code as foobar. It does part of the job of the old Pacific Microsonics chip, but not all of it. A DAC with the old chip will do a better job of reproducing the original HCDC sound than the software solutions.

Helian's point is important and needs to be checked out.