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1. Since I can get to the point of distortion bass-wise, do I even need the ZO2?
Bass distortion might be a sign of clipping on the source, not the headphone (unless you know you have a very powerful source that has a lot of voltage swing). If you EQ on your source, say Clip+ and get distortion, I'll say you are clipping the Clip+ internal amp because it is unable to output as much bass as you are asking for. The point of bass boost on amp generally avoids the clipping problem as they are almost always has more power than the source, which means they can pump out more bass without distortion.
2. Would the ZO2 it somehow make that distortion point even higher meaning I can squeeze out even more bass with the ZO2 w/o distortion? Or is the max bass limited on the driver/headphones?
See answer in Q1. If you have enough power, you can certainly push the driver over its limit. But that generally means you are very loud and I will be more concern about your hearing than destroying the headphone.
3. Would I blow my driver with that much bass?
See answer above.
4. Is the sound quality noticeably better with the ZO2 over the E5 amp?
Yes. But ZO2 is not suitable to hiss prone IEM (high sensitivity, low impedance).
5. Is the sound quality noticeably better with the E11 over the ZO2? Because if bass is limited to what the headphone driver can handle, then I should be going for sound quality over bass quantity.
I'll say yes - but I can see they coexist because they do best at different thing. E11 is for overall sound quality and ZO2 is for bass boost. At least for me, ZO2 works better with some IEM than E11 because I like more bass with them.
6. The E11 having 3 levels of bass boost? What setting on the E11 would the E5 with bass boost on be equal to?
Two levels. Lv 0 = no bass boost. Lv 1 is already 1dB higher than E5 bass boost (2dB). Lv 2 is 4.5dB higher than E5's bass boost. See the RMAA graph on teh 1st page and compared it to the E5 RMAA graph here.
7. How is the battery life on the ZO2 vs. the E11?
Haven't tested it yet, but I think report so far indicate that ZO2 might last a few hours longer than E11. But in general, I'll say they are both around 15hrs or so depending on how you use them.