Well, had a quick look at that keyboard. Interesting, apparently it acts as a sound card as well, so that you can plug in other instruments which send that audio to your computer (?) It does look like a very nice keyboard. I have to think you’re doing something wrong, rather than something is wrong with it.
It has a regular midi connection, but your sound card doesn’t have a midi in. What sound card DO you have? I believe every ‘audio device’ has it’s own control panel where you can adjust it’s levels…even the cheapo one’s built into motherboards (don’t use that). Once you select a sound card in Cubase as your ASIO device, or a device that acts as a sound card (your keyboard in this case I think) you should then be open it’s control panel from that dialog box, adjust levels, pan, etc, etc.
Since you said you get distortion from your keyboards audio outs, you’re either using the wrong outs, or the sound card’s levels are too high…the card you’re plugging it into, and you must likely have that one selected as Cubase’s ASIO device.
At any rate, apparently it’s USB carries audio & midi and I’m assuming simultaneously by my quick read. In Cubase, what are you selecting as your ASIO device? The other sound card, or the Yamaha keyboard/interface? What do you see in your VST inputs/outputs? (or rather VST connections) Your sound card or your Yamaha keyboard/interface? I believe with USB there is a ‘power on’ order, try turning one on before the other & visa-versa…it’s worked for me before.
Do you see any audio activity coming in Cubase’s activity meter? Do you have any audio tracks in this project or template? If so, have you selected that track by clicking on it with your mouse? Are you monitoring correctly on that channel? Try your ‘monitor’ button, you may have a speaker icon. Also, have you assigned an I/O to that audio channel?
If that keyboard does indeed act as an audio interface as it looks like, you probably can’t use both that AND your audio card simultaneously, as only one ASIO driver typically can be used at any one time. So you’ll have to select one or the other, depending on which you’re using at any given time. If you’re trying to use your keyboard, then you should have that selected as your ASIO device within Cubase in order for it to pass any audio through it’s USB.
Also, many devices that use certain I/O like serial & probably USB and others etc, you have to make the proper selection at the back of that device (in this case your keyboard) …does it have a ‘To Host’, ‘Midi’, ‘USB’ ‘Audio+Midi’ etc or anything remotely similar to these? Read your manual, and make sure you have the proper selection made on your keyboard…I’m ‘guessing’ maybe ‘To Host’ if you’re trying to get audio out of it’s USB…??? I could be wrong, and that could be just for midi only for all I know. I know on my Yamaha DTXpress drum module, in order to use the serial port out for midi directly into my PC, I have to select ‘To Host’ and also install a special driver. Since then, I have been using standard midi into my sound cards midi in. Anyway, be sure you have the right selection…there’s probably a small slide switch (similar looking to the forward/reverse switch on a standard celing fan).
Anyway, I hope this at least sparked some idea’s for you, and made you realize you overlooked something.