John, as far as the speaker-level vs line-level connection, there shouldn't be a noticeable difference in the basic quality of the signal, but the line-level connection has the advantage of using the bass management of the receiver. The speaker-level connection would rely on the often inaccurate internal sub crossover for the bass management to the sub and there wouldn't be any to the mains unless there was a fixed high-pass filter on the sub's speaker- level outputs. So, in general, use line-level.
If you mean that the isolation transformer has solved the problem, be happy. It wouldn't appear that using speaker wire rather than coaxial cable would in itself get rid of the second path to ground.
