I can confirm the impressions of the PCM1704. I've been running a Sony HAP-S1 as my main source for a couple months now and it uses the 1704. In fact, the unit's main flaw is you can't use an external DAC at all, however you can use the DAC part with another source. There really isn't any harshness to speak of, but there really is a sense of slowness/body to the sound. Using a CD player (Sony carousel via optical), the sound was super thick but still clear. Pretty fun listen. Switching back to the file player on the unit, the thickness somewhat remains and there is a lot more air, but without the harshness. I mostly use the file player setting.
In a way, it's a godsend because it makes everything so damn listenable. But it does feel like it compromises detail in the process. At some point, I will likely move the HAP-S1 into my cubicle at work because of its small footprint and move to a Auraliti/Audiophileo-based setup at home. I'm following the Yggy impressions closely with that intention in mind.
Also consider this: The 1704 makes the original Magni a decent match for an unmodded HD800. This is a BRUTAL pairing with the other DAC's I've tried (Peachtree DacIt -Sabre- and Fostex A8 -AKM-), usually lasting no more than 3-4 songs at most, but is rather fun pairing with HAP-S1 and far better than I was expecting. It was good enough to survive a decent marathon session of female vocal tracks, anyway.
