Yes, I don't have a firm opinion yet about the conversion done by Foobar vs native DSD, I haven't done any comparisons. Since discovering the difference with the Oppo's analogue output I've decided to keep DSD as DSD wherever possible.So are you saying that on the fly conversion (as would be done in a disc player or AVR at the time of playback ) vs file conversion from DSD to PCM may yield different outcomes? And that the on the fly conversion would be the one that suffers?
If you look in Foobars settings there are a number of different options for conversion. One setting is for the type of filtering to be applied, I suspect that is were degradation is happening Excessive filtering could possibly remove some of the audible signal causing a softening of the sound. Foobar will play .dsf files on the fly by converting to PCM, but again I haven't yet done any real listening comparisons that way, instead I drop the files to a flash drive and let the Oppo play them.