I am auditioning a used California Audio Labs DAC with my home theatre
receiver (Kenwood 6060). I'm hoping to use this more for two channel
in the future.
The light on the receiver that signals clipping will come on briefly
(flicker) during playback on some CD's. There is no audible clipping
but when I play these same CD's using the DAC's in the receiver or the
DVD/CD player (Toshiba), I don't get the flickering clip light.
It is my guess that even though there is no audible clipping going on,
this is not a good thing. Any imput from you learned gentlemen would
be appreciated.

Clipping is not that uncommon on commmercial CD releases, so seeing
an indication of a few FS samples wouldn't be worth a second glance IME.
Rip a few of your favorite tracks and look at them on a computer. OTOH,
maybe you're better off not knowing.