ogodei, I think you are right!
I forgot that the volume control is before the amp section. This means that it's only if the amp is driven beyond it's limit (1.8W in 50 Ohm in low setting) and clip at peaks that you will hear it - while in high power mode it won't clip unless the peaks exceed 7W in 50 Ohm.
With your LCD-3 (91dB at 1 MILLIWATT) headphone I don't think it will be a problem even at loud listening levels when the amp is in "low power" mode. The high power option is only for HiFiMan HE-6 (measured 77.5dB sensitivity) and the old AKG K1000 headphones (spec'd 74dB).
Edited by LarsHP - 10/17/13 at 1:41pm