Hmmm, good point. I agree more with your alternate scenario. ..it IS all in my mind. But then, what isn't?
Instead of following that ontological path of no return, let's assume the difference between my perceived preference for analog is what you suggested...that there are settings affecting the analog playback but not digital, and vice versa. If this is the case, I have no idea what those setting would be.
The Ext-In (analog) mode gives preference to my DVD player to control bass management, speaker distance, etc. As MDS mentioned, "It's possible that the player does a slightly better job of digital to analog conversion than the receiver." I thought this observation made sense, because my DVD 3910 is a more refined and sophisticated (read expensive) piece of gear than the 3805. Switching over to the digital D-Link connection gives all the control to the reciever, which apparently doesn't have the same quality DACs and the player.