[noggin]

It really is a pity that there is no way of running XBMC with YCrCb Limited preserved from source file to display with no conversion to RGB and no conversion to Full range, and only an upscale to 4:2:2 or 4:4:4 from the 4:2:0 source media. However the complication of the difference BT601 (SD) and BT709 (HD) colourspace would be interesting... If you could somehow engineer a GUI/OSD overlay - allowing these elements to be rendered RGB by XBMC and then converted to YCrCb 4:2:2 or 4:4:4 when feeding YCrCb displays that would be an interesting approach (I think that is how many hardware devices like satellite receivers etc. run - or used to)

But I realise, architecturally, this isn't really an issue.

I guess the approach is either :
Let the OS handle levelspace (which means YCrCb->RGB conversion and Limited->Full and then optionally RGB->YCrCb and optionally Full->Limited)
Fool the OS and cheat it by pretending that Limited levelspace is Full levelspace (which allows you to preserve <16 and >235 levels in Limited content AND avoid the banding caused by the lack of transparent reversibility between YCrCb Limited and RGB Full at 8bits)