I assume you are using the WA7's internal DAC? The WA7 will accept the RCA line-in from the Loki, but it won't be able to use the Loki's pass-through function with the WA7's internal DAC (due to the WA7 using the same RCA posts for both input and output, selected via the black input/output switch on the back). So would the Loki work? I believe so, but it would require you to change sound drivers in software (from the WA7 to the Loki), change the input/output switch on the WA7 from USB to RCA every time you wanted to listen to DSD. Of course, then you'd have to switch everything back if you wanted to listen to a standard PCM source! Certainly not convenient/seamless.
The owner's manual's for both describe how they are designed regarding inputs/outputs:
http://schiit.com/public/upload/PDF/loki-manual.pdf
http://www.wooaudio.com/manuals/WA7_Fireflies_Owners_Manual.pdf
The easiest solution would be to get a different, standalone DAC that supports DSD (Quite a few WA7 owners seem to like the Matrix X-Sabre for example). You'll get the added benefit of improved DAC performance/sound. Honestly, the WA7's internal DAC is mediocre and a good external DAC will be a clear upgrade. My $0.02.