What bit rate and depth did you use for FLAC encoding? I use Apple Lossless at 16/44 (native CD format) and it works great. I have not tried FLAC, however. I choose to let the Meridian equipment do all upsampling.

Hang in there - you'll figure this out. I am using a ZP80 into my 568.2 and the sound is spectacular.

Main system: Cable, Apple TV, HD621, G68D, AC11, 218, DSP7200SE (L+R), DSP3200 (L+R Rear)
2nd system: Cable, Apple TV, MC200, HD621, 568.2, M3100 (L+R)