Hey ralphie, the problem is happening because of Windows 7 audio connection…Had that “phase” and muddy washout" happen recently to our system here with the Layla 8 in and outs also…If you go into windows “sound” or audio panel setup, for some strange reason, it may be set at “surround sound”. Unclick this, and all of your stereo outs on your soundcard should pop up. Select your main outs, beit 1&2 stereo pair, etc…This will clear that problem up…