If I set it to 48, wouldn't it not play at 96 at all?
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You should contact FiiO; something obviously isn't working at this point.
Though it would still be best if you're able to try it on another computer. It doesn't matter if you won't be using it on any other computer; what matters is to know which piece of equipment or software is at fault. No point in getting a replacement unit if only to find out that your computer drivers are the ones that are messed up, etc.
Make sure no other cables are near the E17, your computer, or any part of your setup
I had the same thing with the E17. One of the cables leading to the E17 was on top of and near my light cable and static creeped in