I wonder about a "flagship" processor that gets a little retro in its feature set.

Good video processing is probably appropriate, with an option (on a per-input basis) to bypass and the ability to pass through 4K signals (flexibility for future developments in video sources and outboard video processing).

A nice array of input options is important, with an emphasis on the current state-of-the-art (a healthy set of HDMI inputs plus a pair of HDMI outputs, including ARC on at least one of them) and a useful mix of legacy (coaxial, optical, stereo analog, 7.1 analog, component video, and a couple composite video). XLR pre-amp outputs would be appropriate, if only because of how many XLR-equipped amps Outlaw offers.

People expect good room correction. Trinnov still sounds intriguing, but something like MultEQ XT32 may be a more practical course of action unless Trinnov can work out a consumer implementation with a chipset maker like TI or Cirrus so you don't have to re-invent the wheel yourself.

Give it a nice, clean user interface and a simple way to update firmware. The idea of using a USB stick (like OPPO's players do) is a great one, and would be nice to incorporate.

Tuck in a decent tuner (AM/FM, possibly with HD Radio) and a phono pre-amp. Probably include some form of RS232 control for the custom installers and the hobbyist CI crowd, in recognition of the "flagship" nature.

Lastly, roll in a rocking analog section. This could be a higher-end Cirrus DAC or something like the ESS Sabre that the Model 978 was slated to include. The move to building 9.1 or 11.1 analog sections still seems to be slow, but maybe a flagship unit could tuck in a stereo DAC chip to supplement an eight-channel DAC chip and achieve 9.1 (allowing PLIIz or DSX to handle both height and back surround channels at the same time).

There are some obvious omissions from this list, and they're on purpose. Leave out connectivity, support for streaming services, app-based or web-based control, and all the rest of the latest bells and whistles. There are two reasons to do this. One is that it reduces development costs and time, making it easier to get the product to market and helping keep the final cost down. The other is that it provides protection from obsolescence by making a statement: rather than chasing the feature set lists, the unit would focus on the critical needs. it would lose some sales to Onkyo, Denon, Marantz, and others who will offer $1,500 receivers with pre-amp outputs and a feature list as long as my arm, but by allowing flexibility in video processing and by eschewing those extra features entirely it can separate itself some in the market. In some ways, this does what ndskurfer says. It keeps a lot of the Model 978 feature set, maybe tweaks a couple, and goes no farther, but for a product starting development about the time the Model 978 would have reached market that is a little radical.

"My wish list, to mirror the plans of the 978 while keeping the cost down."
+1

My wish list, to mirror the plans of the 978 while keeping the cost down.