is a step up/down electric transformer bad ?

Ralph,
When you say "if you go above that, the transformer will ad distortion to the AC line and the results are both audible and measurable! and not good"...

Do you mean if your device draws 120W max vs your 200W transformer? Or if your device draws only 100W vs your 1500W transformer?

I admit to not having followed you through the forest...

If the latter, can you explain why that would be the case?

T_bone, your first example is what I was talking about, not the latter. 100W on a 1500W transformer is no worries.

The formula for calculating the distortion at the output of the transformer is E = I x Z (if this seems similar to Ohm's law to you it should).

E is the voltage of the distortion component
I is the current being drawn from the transformer
Z is the impedance of the winding of the transformer.

Bigger transformers with greater wattage have a lower Z. So you can draw more current before the distortion voltage becomes significant.

By the time you exceed 50% of the capacity of the transformer, the distortion component will have risen to an unacceptable level. It is the 5th harmonic (300 Hz in the case of a 60Hz fundamental like we have here in the US) that is the most deleterious to electronics. It will make power transformers and power rectifiers noisy, making for degraded sound quality.

Thanks Ralph, you da dude.