I'm curious to know whether it's possible to use a 1070 as an amp along with the (eventual) 998. (I suppose this might be a better question on the 1070 forum, but I figured I'd start here.)

I realize this is not the typical upgrade route, but it would allow me to upgrade one component at a time. I don't have any particular interest in getting a new power amp and using the 1070 as a processor-only, so processor-then-amp is the upgrade path I'd be more interested in.

The 1070 has 7.1 direct analog inputs, so I'm wondering if I could just set the 1070 on bypass, find a suitable volume level on the 1070 and leave it there at all times, and hook the 998's outputs to the 7.1 inputs on the 1070.

Using a receiver as an amp is something that comes up from time to time. It can be done, but it isn't generally recommended.

This is exactly right. Disable the 1070's 7.1 Direct bass management, leave it on that input, set the volume control to a specific value, and calibrate the processor after you do all of that.

True, but as soon as you can do it, upgrade to new amp, much better, you will see...