Hi George,
I used the Krell KRC-HR for about seven years. The HR is the "High Resolution" version of your preamp, so called because of the discrete resistor volume control, as opposed to the potentiometer used in the KRC. At the time, the KRC-HR was supposed to be one of the most resolving preamps made.
I recently tried a friend's Audio Research LS5 (similar age to the Krell) in my system, and was surprised to hear it resolve more detail than the Krell. Surprisingly, even the bass of the LS5 was better. I decided to change my preamp, and searching and auditioning a number of candidates, ended up buying the Audio Research LS26. Totally in a different league. So much of an improvement in every aspect. Shocking transparency.
I just sold my Krell FPB300 and bought the Audio Research Reference 110. Even more of the same improvements. The Krell system, which sounded great in it's own right, made all the right sounds, but never quite sounded like people playing. The ARC stuff does it effortlessly.
In short, I believe your KRC can be easily bested. Be aware though that well set up Krell gear is unbeatable in certain aspects: slam, and the ability to remain composed at tremendous volumes. Try to find a dealer who will let you audition at home.
Which part of the UK are you, and what is the rest of your setup?
Cheers
Mick