Your last test confirms that the problem lies in the signal before the DAC.
I am not familiar with your soundcard or with windows media player, but I think you should look into achieving bit-perfect playback. I use foobar2000 to play my files and have it set-up to play using kernel streaming. This is one method of bypassing windows kmixer which might be responsible for the degredation of the sound you are experiencing. Here is a guide which discusses this with attention given to windows media player. It is at least a starting point. Good luck!
http://www.hi-fi-insight.com/bit-perfect-audio.html
