First: Thanks for all the posts so far - I am definately learning a lot, fast!
Went for a quick hike to experiment a bit more...
Here is two ISO 800 shots (mostly clear blue sky) with considerable better results than what I got initially!!
ISO 800 Test Shot #3 ISO 800 Test Shot #4
Both shots straight from the camera - no PP.
Obvious changes I made:
1. D-Range settings off (Highlight Correction: Off; Shadow Correction: Off)
2. Wider Aperture
I'll keep on experimenting though!!
P.S.
Another thing I learned (inadvertently) is the amount of vignetting I got with this lens (SMC DA 17-70 SDM IF) at F/4.