as far as my understanding goes, SOURCE DIRECT is exactly that. It plays it directly as recorded on the disc.
That is why, if you use that setting for DVD-A and SACD, you'd preferably want full range speakers, all at the same levels/distances. Because that is what the original source was recorded for.
The only 'work around' you may have (for those without iLink), all depends on the pre/pre amp you have.
Some people, can set their 3910 to SOURCE DIRECT ON, so the signal is not being altered in anyway at the DVD player, and you will get the full resolution audio (all channels will be full frequency range, same levels, no BM, etc.)
These signals will then be sent to the pre/pro/amps Multi Channel Input via analog connections.
Now SOME pre/pro/amps have the ability to process the signal that comes in via the Multi Channel Input. So you get the unaltered signal into the amp and then IT does all the level settings, distances and BM etc. (NOTE: Make sure you check the pre/pro specs though, because alot of the ones that allow you to 'process' the Multi Channel Input, do the same thing as the DVD player does, they downconvert the signal (DSD etc.) to an 'easy to handle' PCM signal)
However, most general pre/pro/amps can't do this anyway, they will play whatever comes in via the Multi Channel input as they get it, so you'll still be in the same situation.
But generally, i think you will be hard pressed to hear the difference between having Source Direct On or Off.
SO i wouldn't worry about it too much IMO