David99: I have a GCD-700 and had the opposite problem a year or so ago where the fixed outputs would intermittently shorted out. I wasn't entirely thrilled with the overall sound of the 700 anyway (I've had it for 5 years - time for a change), so I chose to use it as a transport and purchased a used DAC. For what its worth, the sound of the combo was pretty poor, and my first thought was of course that the DAC wasn't very good. To test this, I swapped in my Pioneer DVD player (503C) and things sounded great. After going back and forth for a while to ensure the differences weren't simply in my head, I came to the conclusion that the 700 just isn't a very good transport. I'm not sure why the digital output should be as poor as it is, but Adcom apparently didn't design this guy to be a quality transport.
Just some food for thought before you attack the system with an external DAC. That said, there are some affordable external DACs I know of that do have volume controls without remotes (Monarchy comes to mind). Is he averse to getting up and adjusting the volume?
Cheers,
Ken