how do i hook up a cranesong hedd?

Your post #3 was correct.

ok so it should be setup like this then

mic pre left and right outs---hedd analog l/r input------hedd spdif out-----002r spdif in----

002r spdif out------hedd spdif input-----hedd analog out-----cs analog in.

This looks like the best setup to me - this way the Hedd is handling all of the conversion duties.
 
something tells me this setup is going to cause latency issues somehow. i do not heave the hedd yet so i wont know till i get it. (come on ups)