Started with Stretch-Lite and installed the radio (vlc).
Works after modifying /etc/asound.conf to get rid of dmix as recommended by @gadgetoid.
Also noticed (as already reported) that when paused for a long time the speaker gets very hot.
In the install the line dtoverlay=i2s-mmap is added to config.txt.
This overlay does not exist in Stretch and can be deleted.
The vumeter only uses the bottom LEDs.
Did some investigation and it seems the incoming meter-value is much lower than in Jessie(?).
Maybe something to do with the disappearance of i2s-mmap?
Changing the scale factor (file phat-beat.c, line 88) from 32767.0 to 4095.0 uses the full
LED range, at least for vlcd.
Do not know if this also works for the other pirate-radio applications.