To play/record with NO additional analog loss, a product such as
"Total Recorder" ($11.95 standard edition) or
"Virtual Audio Cable" (OUCH! - $49.00) may be useful - they grab the data stream on the way to the sound card.
After looking up those prices, NOW I know why I hear more about TR than VAC
It's a pity there's no freeware to do the same - essentially it would be a software soundcard driver that could spool output to disk...
Winamp + WMA plugin might be another path, if it can handle protected, and if it doesn't disable the diskwriter output plugin while playing protected.
PS. There was also a tool called UNF**K (fill in the blanks, like in Beckham's text messages) which handled one (earlier?) version of WMA encryption, and some other attempts at defeating other versions - they may well have been hounded off the net by legal action - but it is for the old version, Rights Manager V6.
PS. NO, absolutely NO, direct links to anything like that here please - bad for the forum, bad for the site
Google is your friend.