OK, more tests before buying stuff:
As
@mansr has confirmed, there is some 8 kHz noise components that appear. I could only see them on an FFT Spectrum analyser VST, and the highest one was at -108dB and not really audible. I can accept that without issue.
The test now only connects Data + and Data - to the PC, power (+5v/GND) come from external PSU. Shield is broken in the middle and insulated.
(1) D10 connected to mains earthed active speakers: DAC powers on, enumerates, music plays.
(2) D10 connected to onboard ADC: All works, no buzz.
(3) D10 connected to 12v DC desktop speakers: No enumeration.
(4) as above, but connect the GNDs in the USB cable: It works.
So, whatever happens, the D10 needs to find a ground of some kind, it isn't enough just for a PSU to power it.
Why is it the case the (3) doesn't work? It doesn't work when connected to an un-grounded laptop either - requiring the USB ground temporarily connected for enumeration. But, the opposite direction is fine, an ungrounded laptop does make the DAC enumerate, when using a proper USB cable - because the 'ground' reference is common between the two?
But really, I suppose the biggest question is:
Is there any possibility that removing the ground, and shield, from a USB cable could cause damage to the Host USB port or other equipment?
If there is a fault, most likely it'll go to ground, which be the equipment that is grounded.
If I am at no real risk of screwing anything up, then I will carry on with this and order a bunch of parts.
Makes me wonder why no one has made something like this for sale, an external powered manual USB ground lift box - it probably breaks all USB rules so that won't help actually selling it - but USB extension cables break the rule too, and they are aplenty.