I took my K7XX outside today to test with some expensive amps. I think it's only fair that I report my findings and update my impression on these AKGs.
Two of the amps I tried include Schiit Valhalla 2 and Pioneer U-05.
My conclusion is that an expensive amp doesn't increase the perceived size of soundstage, but the ability to reproduce better imaging, which is just as important at creating a good spacial illusion. It also increases the overall transparency; i.e. less distortion at high volume, smoother and silkier notes, and perhaps better separations between notes (faster decay?). And in some cases changes the tonality of the frequency response (Valhalla makes the K7XX sounds even fuller at the bottom half than it already is). I believe the reason why I decided the K7XX has a smaller soundstage than the AD700 was because of the strong presence of bass, taking out the airiness found in bass light headphones. Again I'm not saying the soundstage of K7XX is non-existent (noticeably larger than my friend's HE400s), it's just not the same as other bass light headphoens like the older AKGs.
With that being said, I would also like to confirm that the Aune X1s a very neutral, true to source DAC/ AMP in comparison with all the goodies I tried today. It did a fair job at representing the signature of K7XX. It sounded just like how it would on other setups, the main difference being the level of refinement. I happened to come across a pair of Q701 and did some A/B testing between the two pairs. To simply put it, the Q701 are bass light headphones and K7XX just add +3dB to the low end; making it sounds warmer, subduing the famous AKG high. So I stand by my earlier impression that K7XX has a comparatively full and warm sound, not the bright and sweet sound I was expecting from a pair of classic AKG headphones. (My guess is that the traditional AKG sound requires an acquired taste to enjoy but once they put out a neutral sounding headphone namely the Anniversary and K712 pro, everyone just flocks to them, calling them the best thing AKG has ever put out).
As for the distortion I was experiencing with the X1s, after doing some research, I found that maximizing the original source volume (100% volume in Windows) and let the pre-amp, rather than the headphone amplifier, do most of the work will reduce the distortion created by the amplifier (I suppose most of you audio nuts already knew but I didn't). I could upgrade the amplifier and bring in the next level of refinement but the K7XX will still put out the same signature.
The K7XX is a very capable headphone and can sound amazing in the more expensive setups. I guess I just didn't care for the +3dB advertised by the K7XX but I can always change it in my equalizer.
As a suggestion, have you ever tried a Grado headphone like the mid level SR-225e which is the same price as the K7XX? The K7XX has a better low end but the 225e has much better instrument separation, better mids and the highs are crisper and more extended than the K7XX, you will give up sound stage since its not as wide or deep (you can change to G pads which will help the sound stage a bit).
I did come across a pair SR-225e and they sounded exactly like how you'd describe them (can't remember about the instrument separation part though), but I'm sucker for soundstage ha ha, so maybe down the line.