Now if i convert from mp3 to flac, if i understand correctly the compression on the source will still take place, 'like winzip', the source in this case is mp3, whereas mp3 to wav there is no compression and sounds like the the file has been eq slightly.
No, you're misunderstanding. Output is identical in both cases.
As i listen back to the track, i can hear the slight difference between the flac and wave track, as i hone in on the drums, snares and HH [ using my ears], the wave track is slightly brighter, giving better defintion to the instruments.
Are the output PCM samples actually any different? If they are, something is going wrong, your software is performing extra processing, etc. If you do it correctly, the output is identical.