The drop out is not really a "drop out." It takes the receiver a second or two too lock onto the digital signal and once it locks on to it, it never "drops out." To some it may be an annoyance, to me it was a mute point. Its not very consistent in its happening in my case. It happens maybe 50% of the time, the same disc with the same source isn't always consistent either. Sometimes, it will start right away, other times it will take a second or two for the receiver to lock onto the audio signal. I wouldn;t dismiss the receiver because of this. Also in the next few weeks an upgrade will be available for DPLIIx, which will be user upgradeable, and possibly a firmware fix for the "lockon" issue you talk about.
As to the second concern you have, I don't have any rear surrounds so I will leave that to someone else.
And with concern to the $1000 price, visit onecall.com and find both for under $840 shipped.
AS for other receivers, there seem to be lots of Yamaha fanboys on here. Both the 1400 and 2400 are very good receivers. Along with the Denon 3803 and Pioneer Elite 53tx. Those seem to be the most mentioned around the $1000 price mark.
