Generally speaking, if this is a MC problem, the cause is found in the Output format defined for the Audio Device. Assuming that the correct Output Device, your Benchmark DAC, is selected in MC, and has any driver installed correctly. Sometimes an audio device driver gets corrupted or needs an update after a Windows Update completes
Maybe there is some channel mapping in the Parametric Equaliser. Maybe the output is set to 5.1 but is being sent over a TOSLink connection. TOSLink only supports stereo, or 5.1 in Dolby Digital.
What does the MC Audio Path show when you play a stereo file? Does it show any down or upmixing? Or does it correctly show MC is outputing stereo?
Can you play a stereo file correctly with Windows Media Player, with your Benchmark DAC selected as the Windows Audio Device? Does it play in proper stereo? That would be a better test than playing a CD using your CD Player.
There is no factory reset for MC, but if you create a new Library, import just a few files manually (don't let MC start importing everything it can find when you create the new Library - stop the countdown in the bottom left corner before it hits zero), and get that to work by adjusting Audio settings, you might find the error. You can also Clear the Library by selecting the Library under Playing Now, and then using the button on the right. But neither of these methods will clear the settings in the Windows Registry, which is probably where the problem is. A reset/creating a new Library or clearing the Library usually isn't a good way to find the problem anyway.