I don't think this is causing the issue because last night I compared the audio quality between my CD player and the Dension unit using the same song. The CD was burned from iTunes using the same compressed mp3 as my iPhone had on it. Thus, both songs were compressed at the same quality.

But compared to the Dension, the CD sounded much, much fuller, like I was being enveloped in the sound. The Dension sounds okay I guess, better than, say, an FM transmitter would. But it is a pretty drastic reduction in quality from what I hear from the CD player, which tells me the Dension is not utilizing the full potential of the Bose.