This sounds odd to me. According to the official website, all models support transcoding FLAC to WAV.
[h=2]Software Specs[/h]
Formats streamed directly : AAC, AIF, AIFF, M4A, M4B, MP3, WAV
Formats transcoded: APE, FLAC, Apple Lossless, Ogg Vorbis, WMA, WMA VBR, and WMA PRO (all models support transcoding to WAV; selected DiskStation models support transcoding to MP3 or WAV)
DS audio - DSM 4.1 - Synology Inc. Network Attached Storage - NEW NAS Experience