Just to update this post.
I have returned and replaced the entire chain besides the Xbox itself and the problem persists.
Short of returning the Xbox, the last option I see is to bypass the Xbox Slim's optical port altogether and get a A/V Optical adapter. Maybe the problem lies in the optical port. Opinions?
The best way I can describe the noise is an intermittent "psssssst." Like someone is whispering for you to come over.
I sort of doubt the optical port was damaged. Unless the jack has popped out of either the xbox or the AX720.
The CALs are low impedance, you may be able to hear the hissing on the AX720. It wouldn't be intermittent though, it would be constant low level hissing.
AD700s (32 ohms + lots of treble) were pretty bad combination with the DSS. Annoying hiss if you were at a quite part of the game. Q701s are great with their darker-and-harder-to-drive-ness. They're dead quiet when the game is also quiet.
You could try moving the setup over to a DVD player and testing it out on the DVD players optical jack.
- If the problem is fixed, it may be the xbox's optical jack is screwed up.
- If the problem persists (and you already tried using another optical cable) it's probably in the AX720 somewhere.
Edited by chicolom - 6/24/12 at 12:02pm