Bayne, getting the subwoofer distance "correct" doesn't necessarily correspond to the physical distance as measured with a tape measure. There are delays in the sub electronics which result in the sound arriving later than would be the case if only the actual physical distance was a factor. It's not unusual therefore if the distance set is significantly longer than what would be measured by hand. The auto-calibration done by Audyssey and other systems is likely to be more accurate than what could be done manually, even if aided by an SPL meter, since the added element of human error is involved.

The reduction of the volume setting on the back of the sub simply has to result in the sub trim in the receiver going closer to 0, since a lower setting at the sub is balanced by a higher setting at the receiver for the same overall volume level. So, the contrary effect would be puzzling indeed.

You've already mentioned the Bypass setting and it's been discussed above, so this is what disables(bypasses)the low-pass filter; there's no need to look for anything else. Note that this isn't the low-pass filter on the LFE channel(120Hz max setting)which is something totally different and isn't what was being suggested to be disabled.

-----------------------------------

Enjoy the music, not the equipment.