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OK an on-the-ground tech report:
"I had an unmodified Musiland for use as simple SPDIF generator and found my receiver had problems locking consistently (I was debugging the software control for this receiver). Putting a 'scope on the signal out of the Musiland showed as per attached, left.
The actual signal level is around 200mV peak-peak and there is a huge 100mV spike on each transition.
First, this is WAY below the IEC 60958 type II specification of 0.5 - 1V peak-peak (and low enough that some receivers designed to this standard will not trigger reliably). Secondly the waveshape is UGLY. And NOISY. Brrrr... No wonder the poor receiver was constantly complaining about unlocking.
Okay, out come the original transformers to be replaced by the "magic part" (sorry, cannot reveal which, it is pretty decent but most important it's parasitics are consistent and I know what they are).
Remove the original disastrous resistive divider. A corrected divider was applied AFTER the transformer, with an impedance that correctly terminates the transformer; drive is now from a very low source impedance (the buffer in the Musiland is < 10 Ohm Z-Out).
After that the trace was much more like it, correct levels at around 0.8V Peak-Peak, minimal ringing on the edges, but the traces where still furry. So I added an SMD CLC filter (1uF/0.1mH/1uF) between USB input and main circuit (musiland has a place for a choke on the PCB but does not fit, shame, things would be much quieter with choke) and I added a 220uF/10V Os-Con as bulk filter capacitor. Now the traces are nut furry anymore. Lower picture but different scale as output level different.
A quick before/after listening test showed that most of the hard and mechanical sound quality has gone, now we do not only get all the bits, but most of the music as well.
Doing the full mod with clock and separate supply is still quite a bit better, but the basic mod alss gives a major step up in sound quality. Oh yes, and I can go back to debugging my receiver control software, for now we have a lock absolutely rocksteady (and the clocks out of the receiver are SO MUCH less jittery, before you could see the jitter with the naked eye on the 'scope!)..."