...it actually sounds worse the higher I go, there's even some clipping in the left ear cup.
I have never experienced clipping from the two Kannons that I've used, even at volumes that I find uncomfortable.
in fact, there's some really weird loud buzzing noise coming from the right ear that only stops when I turn the transducer off.
[...]This leads me to think that something is wrong with this pair. I can't exactly 'prove' it because there's no physical damage and it 'works', so I can't get a refund from the seller... But I just want to be sure that this isn't normal. Is this a faulty pair?
I had similar buzzing electrical faults on my first pair, which then needed to be sent back to home base. Dunno if you'll be able to do that since you bought them aftermarket, but hopefully you'll have a better bargaining position in getting a refund from the seller now that we're chiming in.
As for the HM5s: I use them on mine, and they make the Kannons more comfortable, have broader soundstage, and for my head personally I feel more vibration against the skin. Heartily recommended.
But then as for comparisons to things like the the SZ2000 or any variation of Beats: I've never had a chance to audition them, and so can't really say. My daily-drivers are TH-X00 Purple Hearts with the bass boosted by about 6dB or so in Peace. Used to be 8dB but that made my eardrums feel uncomfortable after a while, so I took it down a notch. The PH doesn't vibrate my skull, but it's also a looser headphone anyway, so it's decoupled from the head somewhat. Comparing the bass quality of Purple Hearts to the Kannons more directly, I'd say PH is more like musical thunder, and Kannon with HM5 is more like a fun earthquake. PH can become more fatiguing with the EQ boost, but the Kannon needs no external EQ bass boost at all, despite naturally reaching much deeper, and the experience never gets fatiguing.
I hope this helps you a bit. In short: Yes yours seem to be busted, no the HM5 will not fix what you're experiencing right now, but yes the HM5 is a great buy
if you have a working pair that you already know you'd like to keep.