So I'm piping 2 channel recordings into the BDA-1, in this case dvd pcm track, then to the analog section of the SP2 bypassing the DAC on the SP2.
I suggest you're not bypassing the DAC of the SP2.
It's only when you utilize the stereo 'analog bypass' function on the SP2 that the DAC on the SP2 is actually bypassed.
If you are using a NEO 6 function on the SP2 (which synthesizes surround sound from a two channel source), and receive an analog signal from an external DAC (BDA-1), the signal first passes through the SP2 ADC (analog to digital converter), then it passes to the SP2 DSP for mode processing (NEO 6), then passes to the SP2 DAC (digital to analog converter) and then the analog signals are sent out the various channels.
If you are using sound modes on the SP2, probably best to feed the SP2 a digital signal directly. Otherwise you are subject to a lot of conversions. The purest use of an external DAC matched with an SP2 would be to use the stereo analog bypass of the SP2.
brucek