I assume your listening to the SACD via the 7.1 Annalog input. That being the case, the 1070 should apply the same processing to a 3.1 signal that it does to a 5.1 signal. Are you dooing anything differently with this SACD than with others ?
What SACD is it ?
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HT:
990/770
Oppo BD83SE
Pioneer Elite DV-47A
Magnavox HDMR513h DVR/DVD-R
Sony DVD megachangers-2
Sony CD megachangers-2
Monster power centers-2
Sony 48" rear projection SDTV
Roku video player
JVC AL-A158 Turntable
Polk RT-2000s,CS-650,XS-650s,RT80s
LFM-1EX
Hsu VTF-1
12" Velodyne

Family room:
OPPO 970
Sony 32" direct view HDTV
Denon 3801
Rolk RMs