I've been poring over this forum for a few weeks now and I've found a lot more 'out there' than what's been discussed here, so I figured I'd ask outright.

I would like a standalone FLAC player w/an internal HDD (preferbaly SATA) that outputs audio via toslink or HDMI.

Such a beast probably doesn't exist, but what I would like a recommendation on is something that does this, w/the least amount of other stuff.

Popcorn Hour. Its music playback still isn't quite up to snuff but it will do what you're asking.

Any networked media tanks (NMT) will provide you with this functionality. Not all NMTs have optical S/PDIF... however, all do have HDMI.

Here's a few that have optical S/PDIF:

Popcorn Hour A-110
HD Digitech HDX 1000
ISTAR Mini

XBMC on an original XBox - you should be able to get it all for under $100 with a 250 GB HD. If you want to go larger on the HD you'll have to create partitions < 256GB as that is the limitiation of the fatx file system or just connect to your home network. I have a 1TB MyBook that has all of my flac files on it and I access if from XBMC easily.