I suspect the biggest problem with the factory plastic screen is that some of the sound hits the hard plastic and is bounced back towards the driver...I can't see how this can be a good thing acousticly. I've heard Jay's K340 on several occasions now and the upper mids and highs are definitely not harsh at all. The highs are very clean with great extension. On the other hand they are very revealing so if your system is harsh or grainy you will definitely know it. I'd guess that Larry offers the mods as a package because he has found those mods sound best as a whole and leaving something out would compromise the sound signature he has worked so hard to achieve. Also, just to clarify, the cloth even though acousticly transparent is rather thick, presumably to provide some sound absorption thereby decreasing the high frequency response slightly while still providing increased clarity over the factory screen.
The biggest problem with the K340 IMO is that it needs a powerful amp to drive them properly, otherwise they sound thin and lifeless. Properly amped they kick ass.
-R-
Hehe my first post.