Affordable Processor with Fabulous 2 Channel ?

Yes

Well, if 2-channel is your top priority I'd do it a little differently in an effort to put more of your budget toward stereo and less on the multichannel electronics.  If this sounds like you, read on.  And if not, just disregard.

With your budget I'd buy a Yamaha RX-A870 (a pretty respectable AVR with a good track record of reliability unlike many others, and you'll get all the latest tech versus an older prepro) from Accessories4Less for $550 and use that for multichannel processing duties and amplification for your center and surrounds if needed.  With the remaining $1500 or so I'd buy a good, used stereo preamp with a HT bypass input.  You may already know this, but you can then just hook the front L/R preouts from the AVR (which the RX-A870 has) to the HT bypass input on the stereo pre and you're done.  You can then seamlessly switch between stereo and multichannel just by changing the input on the stereo pre, and the best part is that for critical 2-channel listening the AVR is completely out of the the signal path.  Best of both worlds!  Only downside is that you'll need one additional pair of interconnects to connect the AVR to the stereo pre (that you may have lying around anyway), and you'll have one additional box in your system -- if that's an issue.  I used this setup for years before I had a dedicated listening room and it was a lifesaver -- even my wife could use it without a problem, and that's saying something.  

Ok, if you're with me so far, right now there's a Pass Labs X-2.5 and a Hegel P20 for sale here for around $1500, and I think both offer a HT bypass.  Frankly, with your wonderful DAC I think you'll get much more out of its performance capabilities in critical 2-channel listening with either of these steeeo pres than any prepro you'll get for $2k, at least IMHO.  

As as for the remote, I'd drop a few bucks on a decent universal remote that will make your life a little easier and more pleasurable on a daily basis than any remote you're likely to get from a prepro.  If the Yamaha comes with a learning remote you might be able to just get by with that though. 

FWIW, this is absolutely what I'd do if 2-channel is your priority.  Best of luck!

I second Soix advise and it’s very true on lower end pre pros from Marantz, Denon, Yamaha, Onkyo/Integra, Anthem. These pre pros two-channel performances for stereo music playbacks are compromised and these pre pros are meant to be used for HT. that’s their main design philosophies.

But high end pre pros like the Classe SSP 800, Classe Sigma SSP, Bryston SP3, Meridian Ref 861 v8 are great for both stereo and surrounds (HT) and can function as high end stereo preamps.

I was going to recommend the Bryston SP3 to the OP (Eric_Squires) but the SP3 is expensive ($9500 retail price) and is a current model, so even if you could find a used one it would be still pricey. The Bryston SP3’s stereo performance is even better than both Classe (SSP 800 & Sigma SSP) pre pros.

The Meridian Ref 861 v8 pre pro is even way more expensive around $32k brand new, But its stereo performance is spectacular.

Expensive processors such as Datasat and Trinnov are phenomenal for HT but I don’t think they put priority on stereo performances. Today Datasat & Trinnov are probably the best HT processors you can get for strictly HT use.

Both the Classe SSP 800 & Sigma SSP stereo performances for stereo music playbacks are on par with high end stereo preamps that are in the $5k range IMO. Their stereo performances aren’t compromised at all like those lower end pre pros from Marantz, Denon, Yamaha, Onkyo/Integra, Anthem.
Actually the Classe Sigma SSP is optimized for stereo listening.
People who bought the Sigma SSP put priority on stereo performance for music playbacks.
Unless if you plan on getting expensive stereo preamps that cost upwards of $7k and up, then yes they would most likely be better than stereo performances of the Classe Sigma SSP or the SSP 800. No doubt.

@caphill -

Might be worth clarifying that you mean digital compression, and decompression, vs. dynamic range compression. :D

Not the same thing. 

The theory is some devices suffer more jitter due to the varying amounts of CPU processing decompression takes. 

I do like to use something like the Wyred4Sound remedy for those devices. Works like a charm.

Best,

Erik