Eniac, thanks for providing the info about the opto-isolator, which certainly seems like something that could be beneficial in many setups, and that apparently has no downside aside from its cost.
However, while it figures to be something that would eliminate groundloop-related noise, without further technical information on it (which I couldn't find via a Google search) I'm uncertain as to the degree of effectiveness it would have with respect to source-generated noise that may be riding on its input signal. For instance, some amount of stray capacitance will exist between the electrical parts of the device, that may to some degree allow noise to bypass the opto-coupler device. Also, I note that its intended purpose is described as surge protection.
Also, I would not necessarily conclude that it would make cable upgrade redundant, because the existing unshielded cables could conceivably radiate noise that would bypass the device. That could occur by radiation into the power wiring, or directly into system components or cabling. Bryon's experimental results would seem to support those possibilities.
Regards,
-- Al