The final thing to try before sending something back as faulty:
- disconnect both BNC cables from M Scaler
- disconnect one BNC cable from TT2
- connect the remaining TT2 BNC cable to the "single output" socket on M Scaler - this is the socket next to the pair of DBNC connections
- set the "video" button to "off"
- make sure the "input" button is either white for USB or pink for auto
- make sure the "OP SR" button is set to red
- play a CD rip from your PC (44.1KHz)
- make sure TT2 input selection is set for the BNC connection you used on the back of TT2
- tell us what result you got at step 8
- move the BNC cable from one input of the TT2 to the other BNC input on TT2
- make sure TT2 input selection is set for the new BNC connection on the back of TT2
- tell us what result you got at step 11
- disconnect the BNC cable from both M Scaler and TT2
- use the other BNC cable to make the connection between M Scaler and TT2, using the same socket on both M Scaler and TT2 as in step 11
- tell us the result of step 14
- move the BNC cable from the current input on TT2 to the other input on TT2
- make sure the TT2 input selection is set for the newly made connection on the back of TT2
- tell us the result of step 17
- disconnect the BNC cable from both M Scaler and TT2 (you must do this!)
- connect the M Scaler and TT2 using an optical cable, making sure that the cable firmly clicks into position on both units
- set TT2 input for the optical connection that you've used
- tell us the result of step 21
- move the optical cable to the other M Scaler output and to the other TT2 input and set TT2 to this input
- tell us the result of step 22
- if your PC has an optical output, use the optical connection from PC to M Scaler. Ideally you have 2 optical cables to perform this step, otherwise use a single BNC cable to connect M Scaler and TT2
- tell us the result of step 25
- if your PC has an optical output, use the optical connection from PC to TT2 and set TT2 for the optical input for PC. Make sure there are no BNC cables connected to TT2
- tell us the result of step 27
There's lots of tests here and none of these tests involve up-scaling the audio sample rate. We need to know whether your system is able to "pass through" CD quality from your PC to TT2 via M Scaler. If all of these tests (except for 28) fail, then the problem is with M Scaler. Test 28 should not fail!
It seems very likely that the M Scaler is faulty, but if any of these test results (excluding 28) are "works OK" then there could be a setup problem relating to power connections or the placement of M Scaler. If you provide us with all of the test results it will make the nature of your problem clearer for us to understand.
The other thing I've done with these tests is to attempt to prove that the fault is
not within TT2. Since there are two BNC inputs and two optical inputs on TT2, I've provided many tests to potentially identify a problem with a TT2 input (any of BNC or optical could be faulty). I'm guessing you have only ever used USB and because M Scaler doesn't have a USB output there is still a question mark over the four inputs on TT2 that you've never used before.