I see no one has picked up a copy of this month's The Absolute Sound where they devote some 8-10 pages in their 4 part series on optimizing computer audio to testing of FLAC and their conclusions are saying that any compressed format, lossless or not (FLACs, AACs etc) are compromised compared to raw, unprocessed WAV files. Cue the rage in 3... 2 ...
Pre-empting all the math ragers who will proclaim that "lossless is lossless" and "there is no difference", fine. Don't sell it to me, I didn't write the article. Set up your own tests using their conditions and systems and prove your point.
But they do discuss multiple types of file degradation, including converting from FLAC to WAV, which in theory should be identical, but their results show otherwise.
I am a skeptic as well, so I've used their upsampling set up from last month's issue: ripping raw WAVs, running them through Izotope RX2 and playing back through both JRiver MC (with the JPlay plug-in for 24-192) for PC and through PureMusic (also at 24-192) on an IMac and then comparing them to FLACs of the same files (at 0 compression ratio). There is a difference. And it's noticeable, especially on my 2 channel system with Maggie 3.7s. Whether it's due to the dithering from the upsampling, the file format itself or how the PC handles the files, there is a noticeable difference, most dramatically in lower/higher frequency extremes. I've had several non-audiophile friends come to the same conclusions listening to the same files.
The trade off of course is that file sizes are enormous (100-400 Mbyte per song). I won't rip every album using the upsampled WAVs, but ones I have, I've been listening to them a lot lately.
But Neil Young has an advantage none of us has: he knows the master tapes of his music. Also, he knows what it should sound like in his head. Any kind of copy is going to sound inferior to his ears.