I don't have an LCD-4z, but for me the Hugo 2 produces the same sound via USB or optical. This is what I'd expect from a DAC of this class anyway; a decent USB input that sounds as good as its optical, because optical is the easiest to implement/hardest to screw up.
I totally agree which is why I’m quite puzzled..
The only other variables are via optical, i was using a moon audio toslink direct from my DAP. USB was via CCK from an iphone. Have to find time, upgrade my DAP firmware so I get usb out. Will be a fairer comparism I guess.