Something definitely seems wrong. What kind of DAC do you have? Are you sure it's providing a line-out signal to the Lepai?
I would definitely expect the DAC to be a noticeable improvement over your netbook's headphone out. Also, don't worry about getting the full range out of the amplifier's volume control. You should be running 100% volume in Windows. (The Windows volume control would still turn the volume down if you wanted it to, but for normal use, it should be at 100% if the DAC is providing a line-out signal.)
The Lepai may start clipping at about 12 o'clock on the volume control, but by then it should be plenty loud. I mean it's not a high-powered amp by any means, but it should still play plenty loud before clipping. I have a feeling somehow the Lepai isn't getting the proper signal.
Perhaps you could try this. Do you have an MP3 player or portable music player? Just as an experiment, try running a cable from it's headphone out to the Lepai. I know that's not how you ultimately want to listen to your music, but it might be worthwhile experiment just to see if you get some kind of drastically different result. At least you'd be able to compare and see if it's noticeably louder than what you are getting from your computer set-up.
Another experiment you could try is switching between the RCA or the 3.5mm input on the back of the Lepai. It shouldn't make any difference, but since you are possibly having trouble, have you tried the other input as an experiment?
Also, double-check your speaker wires and make sure everything is okay there.
Edited by StratocasterMan - 1/7/13 at 9:59pm