Thanks for the responses.
Here's the problem I'm having: No combination of limiter, auto level control, mic attenuator or rec. level reduction produces a clean signal despite keeping the meter well below -4dB. Using an external mic preamp with SPDIF output into the Marantz) DOES produce a clean signal. Thus, the problem would seem to be the Marantz pre-amps.
After speaking to Marantz they told me that the auto limiter and ALC settings were NOT intended to produce hi-fidelity recordings; they're mostly for setting the unit on a conference room table to record a meeting (voices) without having to worry too much about re-setting the level every time the volume in the room changes. For audiophile purposes, Marantz definitely recommends setting input levels via the MANUAL setting only.
But I can't figure out why distortion can only be avoided by severely diminishing the input levels and using a mic attenuator. What's the point? That just raises the noise floor when you have to boost a weak signal during mixing and mastering. That's counter-intuitive and a basic design flaw of the unit. Too bad, because otherwise this deck showed some real promise. Nice designs and simple to use. But the final measure of worth is in the sound quality, and this unit just doesn't cut it.