Everything you said makes perfect sense. Current pop songs that come on radio have to fight for air time and one thing you can do is compress them and make them louder at the expense of clipping and loss of range. We call this the loudness war. A good read for anyone that's interested: http://en.wikipedia.org/wiki/Loudness_war
The people who make the typical "audiophile" recordings know the population sector they are targeting and so don't have to adhere to the strategies commonly used now. This is why you usually can go louder with audiophile recordings because they allow the track to breathe. (Kinda went off track, thought it might be interesting though for others perhaps)
I use the 2.5X as well - makes sense and we got similar results. Yes, with 6.5X, I can confirm the sound coming from the HE-500 has a lot of distortion

























