Jim:
For all it's worth, I have a vacuum tube preamp in line with my front left and right speakers, and I have the analog output of my Sony CD player connected directly to one of the line inputs of this preamp. The 950 is connected to another line input of the preamp, and this way I can switch back and forth at will to compare a 'pure' analog path from the CD and the output from the 950 in it's various modes. I have listened to many CDs with this setup, and the result is that I cannot tell one bit of difference between the 950 (in any stereo mode) and the direct connection. As Will suggests, there might be some other factor in the bad sound from your 950. You might try duplicating my setup using your existing HK preamp and switching back and forth through two of it's inputs; maybe you might uncover something that is causing the bad sound in your 950.