The phase problem tamed at last !!!
Well let's get back to the beginning.
Getting the Denon 4806 Auto Speaker Setup to work well was quite a chore! It took me 2 days and my wife said I was going beserk listening to the receiver emitting the "woosh-woosh" sounds

First of all I recommend reading the excellent
article about the Denon 5805 on audioholics. Lots of info about Audyssey EQ and its quirks.
Second this is what I learned:
- Find a "hot spot" for the mic to be set up. And it is most likely not going to be a real listening position. Mine was not even fully "equidistant" of the 5 speakers (am not considering the back surround because that is almost impossible to be equidistant). The trick for me was to get the mic closer to the front speakers otherwise the EQ would insist on labeling my front speakers "Small" and placing a higher crossover for them than for the surround speakers!!! Which is very odd because my front speakers go lower than the Surrounds; it maybe to the fact that the Fronts are Martin Logans electrostatic (the back surrounds are as well but they use a different technology than the Fronts - they do not require an AC cord for example). Now the challenge is that if you get too close you will get "false" readings, easy to spot though, in my case it boosted too much all the speaker levels (including the subwoofer).
- Phase: this is somewhat of a mystery still. First, kuddos for the EQ for getting it right on the front speakers. It told me they were out-of-phase although the cables were wired correctly. I then unplugged one of the cables (a lot of work believe me, I have about 12 devices and a plethora of cables on the back of the entertainment center - it is a nightmare to take one cable out!) and to my surprise the cables (AudioQuest but assembled by a dealer) were inverting the polarity!!! That dealer is going to get a nasty phone call from me

Now the center speaker (another Martin Logan) is still a mystery. I pulled out the cable and rechecked a thousand times and it is wired correctly. Still the EQ reported they were out-of-phase, following the manual I decided to ignore it and all went fine. I'll take my AVIA out tonight and test to re-check the phase.
- EQ distance compensation: It was spot-on for all speakers except for the Center which was off by 1 feet or less. It may have to do with the fact that due to some constraints, the center speaker is sitting on top of the entertainment center (I know bad placement but there was no place else to put it, the projector screen when down would cover the speaker which is even worse - ok I could buy another screen but where is the money?).
Now what is next ? The HDMI seemed to not be passing black as it should. Investigation under way. I also plan to test whether this receiver can go head to head with a Krell stereo amplifier. I did some preliminary listening (but true before the EQ got sorted out) and although the sound from the 4806 was nice the Krell (which puts out 2x200W at 8 ohms doubling to 2x400W at 4 ohms) had more headroom. It is very noticeable on classical music, when the orchestra goes so does the Krell, the Denon does not increase in the same proportion.
And a final advice, getting the EQ right is a must. When it was wrong the sound was not good at all, bass bloating from the subwoofer and some background noise. And I did not take any chances and used a tripod. It is $20 at RadioShack and you can use with your camera as well
