Mo, very definitely the closer the miking on a recording, the less ambience that DPLII, Logic 7, Neo:6, etc. have to work with. To a certain extent the "Dimension" adjustment on DPLII(x)Music can compensate for this by sending more ambience(not simply a volume adjustment)to the surrounds and ocasionally I adjust it.
On the "wraparound" effect, are you sure that the "Panorama" setting hasn't been turned on? DPLII is specifically designed to keep front channel material out of the surrounds, but setting "Panorama" defeats this and adds some front channel channel sound to the surrounds for an effect that may be the wraparound that you've described. This is sort of part-way to all-channel stereo, an effect that I don't care for and never use. Otherwise, I've never experienced this.
All in all, of the roughly 1,000 CDs that I have, the number that I've found to sound worse with the various ambience processes is zero.
