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We all agree Terry, you should be having glorious sound right now. Something is amiss and it isn't the quality of the gear. Would you like to try my stock Squeezebox in place of your Touch before you go messing with the Touch?
If you have a chance to compare it to an unmoded Touch in the exact same configuration, that would tell if the digital output is the problem.
I would say to only way to know for sure would be to either try another Touch in your system or to use your Touch in another rig.If you wish, you can send your Touch and supply to me and I will be happy to evaluate it. I would also be willing to send you my modded Touch and a modded Jerome to compare to your unit.Let me know what works for you.