I just want to say that you are RIGHT. But so RIGHT.
I did the same and its BEAUTIFUL. the main difference between us is that I only hear ripped CD's in WVA (better than FLAC, for 16bit 44.1, of course) and I've added a DC/DC PS. believe me its a big difference. If you want I'll give you the schematic. The app to rip is the EAC.
By the way I would like to have more information about the Toslink conversion in coaxial if its possible.