maybe a little unfair to blame the O2 for not behaving well when used wrongly?
even on typical amp designs, it's usually advised to use the lowest gain options unless you can't go loud enough. which is even more important on the O2 as having high gain only forces us to use the lower part of the volume control that can have pretty bad channel imbalance. and then using 6.5X with a 2V or more home DAC is an easy way to go clip the O2, it is very well documented so here most likely the 6.5X is a 1 action, triple bad decisions ^_^.
on the O2 the gain settings were primarily thought of as a mean to compensate for weak portable sources when used as portable amp with weak daps such as an ipod(yes the gain is to adjust the source in this case, not the headphone).
only with my sony A15 could I explain the need for 6.5X for a hd650 and loud computer volume setting. as the line out is somewhere in the 0.25v so 18db quieter than the 2V odac.
That is a good point, I wish I had the o2 to test it again on the lower gain setting (with the volume knob turned higher, of course.)
I found it strange that my Asgard 2 on high gain had no issues but when switched to the o2 on high gain (6.5x) same volume as the Asgard 2 the o2 completely fell apart.
I'll see if I can borrow my friends o2 again. Anyhow, thanks for the response!
it's really simple once you know it, because of the O2's design, you can very much overload it. with the hd650(300ohm and above), distortions come at around 7V. so from there it's simple, the gain is a voltage multiplier value. if you have a DAC that outputs up to 2V and you use the 6.5X gain, you're asking the O2 to deal with 6.5*2=13V. but 7V is the O2's limit... oops ^_^
so ideally, you would try to find out your DAC's output voltage, and set the gain on the O2 to come close but stay below those 7V where it starts distorting(it's a lower value if used on battery!). so here the obvious answer is to stay at lowest gain and if necessary, to lower the computer's volume level a little so that the DAC will output a lower voltage. but that shouldn't be necessary with 2.5X gain unless the DAC goes beyond 3V.
the asgard has a different design, and also can output close to twice the power at most loads. meaning the voltage limit is a little higher on the asgard and so is the clipping point. that alone is more than enough to explain your experience.
now in practice, the hd650 will never need more than 4V(115db loud), so with a 2V DAC(old odac, bifrost,gugnir,...), 2.5X gain goes up to 5V. more than the hd650 will ever use with a reasonable human under it. so 6.5X really serves no purpose here.
with the modi, the output is 1.5V (think about that when you test DACs, else you'll just think the loudest is better). so with 2.5X gain on the O2, the max we can reach is 1.5*2.5=3.75V you'll "only" reach a max possible loudness of 114db on the hd650
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all this to say that with a hd650 and a standard DAC(1 to 3V), high gain numbers serve no rational purpose on any amp.
some come with an impedance increase on high gain, so the sound of the hd650 could be slightly different(less controlled bass, more mid bass bump), but most likely high gain will only bring more noise and waste energy that the headphone will not receive.