Okay, I think I can put this one to rest.  This morning I plugged the IEMs into an extension cord and then to the mac. Same issue. So it's not the DAC, but something about the adapter I was using, or rather the phones being incompatible.   Thanks all!!

It sounds like the audio is coming from the next room with tons of clipping if I give it any volume. 

I'm running optical from my Macbook pro to the DAC (Denon DVD5000).   With my full size phones (ATH-M50) it sounds great; plug in any IEM and the sound turns distant and generally terrible.  Is there an impedance issue or am I missing something?   If I plug any of my phones straight to...