Hay, JJ, BobK, BobO, have you heard about FSLAC? http://www.ecodis.de/audio.htm#fslac
I was just fiddling around trying to find more tech info on FLAC (like exactly how they do the LPC and how they do the entropy coding and if there are other tricks in there) and discovered this FSLAC thing. When things get noisier, it turns out that lossless coding gets less efficacious and that’s where FSLAC might cut a few perceptual corners so that the maximum bit rate is constrained.
Now, conceivably, someone with golden ears might be able to hear the difference between the original and the FSLAC, but it would be only at noisy frames of audio.