Suggestions on replacement AV processor...

Get a good A/V preamp and a separate audio preamp. I have the Lexicon MC-1 and love it but it really needs a good preamp after it to make 2-channel shine. Check out a used BAT VK-5i or the like. These two in combination are very nice.

I recently purchased a Krell HTS. The Krell is fantastic for movies but not very good with 2 channel. This isn't an issue for me as I run the digital output of the Krell to my external DAC.

In terms of having to have seperate HT and audio systems, I strongly disagree. The problem I always had with the two was sticking a TV between my two speakers. I avoided this problem by purchasing a DLP projector with a retractable screen. My audio is set up optimally for music and the HT is an "add-on" that doesn't get in the way. I am blown away by what a great video system can do when matched to the same caliber as a high-end audio system.

It is possible but it will cost much more thn 4000 dollars. Your equipment is not cheap, so even after you do choose a preamp/processor your just gettting started. By the way I chose the Theta Casa as well. Digital technology is changing at a remarkable pace but a smooth tube sound will always be a constant in your system just based on your Cary components. Do your homework on each of the companies and read everything you can especially there philosophy on the incorporation of new digital technology into there existing models. I already agree with your system design; tubes in the front and tubes at the end of the audio chain. While not cheap definitely sweet.

Thank you all for your sugestions. I am going to persue a dual system.

Many/most prepro's these days will have an analog pass-through for your 2-ch pre and whatever source components are hooked to it. So you don't necessarily have to physically separate your systems, except ...

The worst part of an integrated system is the front speaker placement. It can be tough to get enough physical separation from boundaries, be they the front wall, equipment racks, or a hulking RPTV monolith. I've flipped-flopped from separate to integrated and back 2 or 3 times over last few years. With the maturation of multi-channel SACD/DVD-A, I can see going back to integrated, but only when I also switch to a front projector to get the front stage set up well. What's your display situation?