well sonic heaven has been resumed ..
The solution - I used Audiofile Engineering's Wave Editor to resample the 44.1 files to 48kHz (trial available) - apparently it uses something called "Izotope SRC". And now Achtung Baby / U2 from HDTracks sounds incredible through my DVD player / system at 24-bit.
Just for comparison I left some of the original FLAC 24/44.1 tracks on the DVD and let Toast change 44.1 - 48 , result: same as before distorted / lack of soundstage.
I intend to also try SOX for the resampling - it is free.
Apart from the sample rate issues the whole process with Toast was flawless to make an Audio DVD complete with menus - up to 24/96 resolution of course.
Hope this helps others.