ASIO Peak/recording distorts but CPU/MEMORY load OK

Help Please!! I have an ASIO performance issue but it is a strange one and I think I have identified the cause but need advice on how to fix it.
I have recently installed Elements 8 on the free upgrade offer having purchased Elements 7 in March which worked Fine
I use an MBox2 with USB connection to the PC Intel core i5 4570 3.20GHz with OS (Win7 64bit) and Apps installed on an SSD and files and project storage on a partitioned 1TB HDD. The MBox functions fine with SW like Adobe Audition but I needed the Midi which Cubase offers). Device info ASIO Input latency: 5.011ms Output latency: 5.011ms
Asios Guard latency 23.220ms
HW sample rate 44.100KHz
HW Pull Up/Down Off
Activate Multi Processing checked
Activate ASIO-Guard checked
guard level normal
Audio priority Normal
Activate Steinberg Power Scheme checked
Disk Preload 2 seconds
Adjust for record latency checked
Record shift 0 samples
I connected a CP80 piano on a Mono Audio channel and can see the audio meters redistering in Cubase on the Transport bar. The ASIO Performance monitor barely registers right up to the point where Ihit record then the bar still doesnt register but the Red Peak lights both illuminate. The recording distorts/stutters on playback. BUT HERE IS THE STRANGE PART:

Using the Play button in EDIT view the playback is clean and if I clear the peak lights they dont illuminate. HOWEVER as soon as I hit PLAY on the transport bar the playback is distorted and the peak light illuminates Instantly.

NOW HERE IS WHERE IT GETS REALLY INTERESTING! Using windows resource monitor I can see the processor is barely utilised (as it should be and I am only using a couple of GB of the available 8GB RAM. BUT the HDD Swap file is totally maxed out when using playback on the transport bar but CLEAR when using PLAY on the toolbar in Edit view.
I thought it may be AV security software causing problems so disconnected the PC from Home Network?Internet and totally disabled all the security software. Still the same problem. If it was the way the recording being stored And accessed I could understand but then why would the playback be clean using the play button in Edit view toolbar??