Yep. The denon's throw off some substantial heat. This is considered common knowledge IMO, and there was even a part of Amir's X3700H review where he takes thermal readings with a thermal camera. It's probably the power supply stage causing the distortion. Inadequate power supplies and transformers are a common design deficiency in pretty much all AVR's. Transformer's react to heavy loads and high thermal environments with lower output voltage on their secondary windings, and that's putting it very simply. Then, on the second half the of the issue, you most likely have SMPS issues. If too much power is pulled you get switch mode ripple and harmonics introduced into the amplification stage, and then you just have a mess. If your filtering caps are inadequate due to "size restrictions" of, oh, say a compact AVR, then you'll also run out of filtered DC and see more artifacts in your supply power.
To learn more, here is a good article worth reading. Check the second page for the majority of information on power supplies. I'm sure there are better article's out there, but I didn't want to spend too much time digging.
https://www.audioholics.com/audio-a...or-switch-1/amplifier-and-power-supply-basics
I believe that audyssey controls every part of the DSP (speaker levels, timing, crossovers, room correction/EQ). This is apparent when using the Audyssey MultiEQ app, as the suggestions are right there in the app. But, it's pure speculation on both our parts, there is no way to know unless you've got intimate knowledge of the DSP('s) signal path's and you're an design engineer at Sound United.
Best of luck fine tuning your X3700H!