Iftach - I also have the Denon 3802 paired with a KSW 12 sub.
I had the 3801 on demo before that, and when I switched I also thought the sound dropped in quality - that the 3801 sounded better, particularly on midrange sounds.
After much tweaking however, I am pretty happy with my setup (I also added external amps, but that is another story).
Everyone here has given you excellent advice, to which I would only add two suggestions:
One, I believe it is difficult to accurately measure bass sounds with the Radio Shack meter. It doesn't read low sounds to well. At least that has been my experience. I would suggest setting the bass level by ear, and using the meter to measure all other speakers.
Second, I have read that it is better to turn down the volume on the sub itself, and raise its volume by turning up the sub output on the Denon. That's because the sub's volume will also raise the volume of any interference in the line, whereas the Denon's volume level will only increase the signal itself. May make a difference, may not.
Good luck!
This message has been edited by belial on 05-20-2002 at 01:10 PM