After some reading, you can perform a line-out with the E17 using the L7 attachment, then connect to a line-in on the receiver, and connect the external amp via line-out. That will bypass both the E17+receiver amplifiers. You can then connect headphones directly to the amp. That way, you are still able to have the functionality of your receiver and have separate amplification for your headphones.
Start with USB into the L7 attached to the E17.
Then connect the E17+L7 via line-out to a free line-in on the Yamaha.
Then connect the Magni/Asgard to a line-out from the Yamaha.
Last, connect your headphones to the amp and enjoy!
I assume the USB would be running to the PC? That's where things get squirrely:
Besides having to deal with handling DD/DTS (which the receiver does, but will not downmix out of anywhere but the headphone jack), I would also lose Silent Cinema which I would like to retain for movies. Is double amping the Schiit going to be that bad? That's what I'm curious about. If it is, and I really want to go the route of separate amp, I may be better off with the additional sound card and going Line Out from it. This route requires more manual intervention though which is why I was leaning toward the headphone out on the receiver.
So bottom line: is double amping either Schiit product going to negate any benefits I would get over something like the E17 (which I do not have to keep- still have time to return).
I would try the Schiit but I already have several pieces of gear being auditioned...that I will likely return. I'm not usually the type to do that and I'm sure amazon frowns on it some :) I know Schiit explicitly allows for it though.
I appreciate your help :)