When I say loud I'm exaggerating a bit. I'm listening at below reference, probably as high as -10db or so when I'm cranking it. Currently, I'm not even getting that high because I find it too harsh. I can't see myself overdriving the x4700. I'm running Pioneer SP-FS52 in stereo so budget speakers that are power-hungry but were driven fine by my old receivers. I know my speakers are budget and are on the list of things to upgrade but I've always been fond of them and they have never sounded harsh like this.
I've only started to delve into the back and forth regarding Denon vs Marantz. What I'm experiencing is profound and I feel like there has to be something that can be done is settings and EQ to sort things out. I want to try everything I possibly can to get this receiver sounding decent before giving up on it.
I agree there's no reason to assume that unit is underpowered. The x4700 is as powerful as my old Pioneer and more powerful than my Onkyo placeholder.
Sounds like you are running just two speakers and not at extremly loud volumes so you ruled out overdriving the 4700. Does the "harshness" you describe exist with all input sources? Have you compared music sources that reproduce the harshness you describe with the reproduction of some test tracks on a HQ stereo or surround sound test CD? Is the "harshness" the same with Audyssey "on" and "off"? Have you ruled-out "settings" issues? I'd recommend reviewing your Audyssey calibration technique and hygiene....ie, room silent, microphone absolutely perpendicular to the ceiling, take all measurements withing 20 inches of the 1st measurement position and all at the same "ear level". Audyssey eq results will only be as good as the exactness of the process.