The fiio L9 came in today and I cannot resist testing it out. The distortion is still there, surprise? It's much less authority but it's still there. At first I was like "What's the heck is going on, Am i that bad luck?", so i pull out my old iPod Nano (2nd generation) to test again and you know what? All the distortion is gone, just left this beautiful, clean, punchy, addictive music (yes, it works with both L3 and L9). My guess so far is maybe that's the iPod touch (2nd gen) is not fully compatible with the Zo in some way, not the Lod. I'm curious whether anyone out there with newer iPod model experiences the same problem as I'm planning to upgrade mine?