I'm all but certain that the distortion is simply the amp clipping the signal...I can always fix the problem by turning the sound level down in my media player by about 10-15%. Unfortunately, I can't do this on my iPhone with a LOD...so some heavily compressed albums sound atrocious with bass boost on (i.e. something by daft punk).
Is it possible in Win7 to change the system master volume level while using DAC with the E7? I hate having to set Foobar2k at 80%, but then everything else plays quite a bit louder.