Glad to read this as I had been planning to attempt exactly that process of taking digital out from a cd transport and recording to DSD on a Tascam DA-3000 (sadly mine is not Decware modded).  I could not tell from the manual so an experiment was on the long list of things I haven't had time for.  One less thing to try.

My main interest lately has been to record vinyl to DSD and that process is successful (though time consuming).  It is by definition analog to digital and the resulting DSD sounds exactly like the analog source...  A further experiment is going to compare using different cartridges and turntables.  My guess is that DSD from the analog outs from whatever cd player you use as a source will sound exactly as good (or bad) as that player on its own.

I think some people use the ZDSD as their main DAC so PCM (ripped from cd) from SD cards should sound as good as that.  Maybe better given fast cards and fewer wires.  I am curious to read other's thoughts and experiences.

To the OP's third undefined option about other methods:  I have many downloads from discs ripped by a service which depending on the size of the collection might be cheaper (and certainly take up less space) than investing in a high-end cd player though not cheaper than a basic cd drive and ripping your own.

Some of those rips I converted to DSD via inexpensive software (EasyDSD for Mac).   I think the converted DSD files sound a bit better than the original PCM versions played either locally or streamed.  Might be my imagination and I stopped doing it as my current DAC does DSD conversion (if not already) on the fly.  If you just want to play them on the ZDSD from SD cards without conversion, WAV format should work fine.

Looks like the free Tascam Hi Rez software will convert both ways but also looks like a chore (or a fun adventure).

I don't actually use the DA-3000 for listening lately, but as a hifi component, my vision was to have on a nearby shelf a bowl or small tray of CompactFlash (or SD) cards holding individual albums or small groups of or what the kids call 'playlists'.  Pop one in, press 'play', bliss out.

I prefer to listen to DSD exclusively and I really like the idea of handy external memory cards as a medium but the commercial files are spendy and slim pickings to download and making my own has proved daunting.  I have more time now so will see what the future holds.