You've got to think about why you'd want battery power.
Its only benefits would occur if you're using the HAGUSB as a DAC - - i.e., as an audio device (rather than as a USB to SPDIF converter, for which it was designed).
If you're doing that, then in theory, having either battery power or non-computer-PSU power would have its benefits for the quality of audio, by providing something smoother than the computer's PSU on the audio side of the chip. BUT:
1) You'd want to isolate the analog grounds (notably PGND, but also AGNDL and AGNDR) from the digital ones, and possibly provide separate regulation for the analog and digital VCC lines
2) You'd need to wire the PSEL pin low and probably use the HOST pin as suggested in the datasheet
3) You'd need to rewire the USB input -- note that the ground would still have to be connected to your computer's ground, with all the inherent noise... to avoid this, you'd have to use some kind of transformer coupling -- such as that provided by the HAGUSB's SPDIF output!
4) You're most certainly going to want the audio output to go into something more robust that's powered by more than a +5 supply -- ideally an op-amp with +-12 to 15V balanced supplies
You could do all that, slicing the traces on the PCB and doing a lot of micro-soldering, and it would maybe improve the quality of the DAC's sound a bit. BUT if you're going to go all the way to do that, you're going to start asking yourself why you're using a PCM2704. It's a perfectly decent DAC, but nobody's claiming it's audiophile-quality. You're talking about an audiophile-class tweak to a device that really isn't up to the job. All that effort, you might as well add a discrete DAC chip that's better-sounding - - and you might as well get really audiophile and provide it with a transformer-coupled SPDIF output, like the one you've got in front of you!
HOWEVER, if you're using your HAGDAC as an SPDIF converter, it's already an audiophile-class device -- the very well-designed transformer output guarantees this. The type of power supply is not going to affect the qulaity of the digital signal in any way.
If you are interested in upgrading it, so you can have boasting rights over people who've spent $800 on similar USB-to-SPDIF units whose only difference is their "self-powered" claim, try this:
1) Buy a self-powered USB hub (~$20)
2) Plug the HAGUSB, and only the HAGUSB, into it
Bravo! You've just isolated the HAGUSB from your computers' nasty PSU, and made it self-powered, without even plugging in your soldering iron. Don't like switching supplies on ideological grounds, even for all-digital circuits like this? Buy or build a simple linear +5 supply, and use it to power the aforementioned USB hub.
