Noise and overdub issues with ASUS Xonar U7

Good evening everyone,

Let me first describe the configuration of my PC and equipment. The PC is a pretty standard one, running Win7 Pro x64. There’s Cubase AI 6 x64 installed. The sound card I use is ASUS Xonar U7 (not the best variant for professional recording, however, I’m an amateur, so it’s enough for me). The setup is a little bit tricky. The sound from Xonar U7 comes through 2RCA-2RCA to a mixer (Alto ZMX52), there’s also a guitar plugged into the mixer via an effects processor (BOSS ME70 if matters). The main output of the mixer is connected to a Yamaha A-S500 integrated amp (then it goes to the passive speakers I have), the AUX OUT on the mixer is connected to a MIC jack on the Xonar U7 for the purposes of recording. However, it does not work well.

  1. If I press the Monitor button in Cubase there’s a noise coming from the speakers which stops only after I disable monitoring.
  2. The main issue - if I record a track and then I want to make an overdub and record a new one, the sound from Track 1 comes into the Track 2 and it makes overdubbing a real pain. I’ve read a lot of forums on this subject and the only “panacea” proposed there was turning off Stereo Mix in Windows sound settings - however, it does not work for me as Stereo Mix has been already TURNED OFF and it was never used before (I DO NOT record sound from Youtube etc.).

UPD:
Between the publishing of this topic and approvement by moderator, thanks to guys from StackExchange I’ve ruled out the most possible reason: an infinite loop between the output of U7, mixer and the MIC input of U7. So, I will have to change my question to: Is there any way to set it up right (and get rid of the infinite loop) without buying a new sound card for recording?

Best regards,
Paul