ML No.39 or Proceed transport + BelCanto DAC2?

Well, I would be surprised if your BelCanto would sound as good. Who told you the transport system was the same between the 37/39/390s? I guess it could be they do look simalar. . . but the electronics, power supply, circuit design all would make a huge difference in the sound quality among the units. Proceed was never designed to compete with Levinson sonically. They used older technology from units built before. They were never meant to be on the cutting edge. Also who rebuilt your unit? Unless it was done by Levinson I'd be suspect. If you opened up a #39 which I have and then compared it to a Japanese DVD or CD insides you would see a differnce. I've been in the hobby for 23 years and am not a salesperson (I'm and educator)so have no axe to grind for Levinson. Rest assured there is a big difference in the big names like Krell/ ARC/ Classe/ and others vs. the normal imports. If your unit was supposedly rebuilt and you have problems or concerns, contact Jamie Cohen at Harman Specialty Group. He will be glad to help you out.
Hope this helps,
Steven

Sgr, the Proceed was thoroughly upgraded by Madrigal 1/03, with a receipt outlining all the hours and parts that went into it, incl a whole new drive ass'y and support pieces. Two different customer support techs at Madrigal told me that this drive unit is now shared with CDD/37/39/390s, as there are fewer options to choose from, and all these units share the same block diagram/architecture. Looking at the insides of the CDD and 37 show many shared parts and circuit elements, incl power supply and clocking. The 37 and CDD were designed in parallel in '95, and even the current 390s uses essentially the same transport. The big diff is in the chintzy Proceed chassis and front panel, and some feature omissions and cheaper parts - and even then this was a $2500 transport, so not chump change. No beef against ML, just that I didn't want to spend the extra $ for the cache, resale, packaging and perhaps 5% (??) better sonics.

I likewise have 30 years into this hobby, and wanted to hear what a well-designed transport sounded like driving a well-regarded DAC. After more listening the CDD DOES sound better than my other CDPs, but not as much a sonic near-transformation as the Denon DVD-2900 digital outs provided. Perhaps like yourself, and as an EE, I too have to reconcile the packaging and engineering inside a good high-end piece vs the actual sound. And sometimes I get a rude surprise that something that shouldn't sound better does...

Well the audio world is always full of surprises. Not having heard or seen the units in question, I'll take your word for it. These things have happened before. I too do not like rude surprises and when I pay a quality price, I'd expect it not to be bettered by something less expensive.
Hope you find what you're looking for. I've heard that some of the CEC transports are very good.