FTU quacks like a duck

I currently have a problem where everything I hear during playback or recording in Sonar 8.5.3 sounds like a variation of a duck being squeezed too hard. Hopefully someone has a few ideas to try and help with my problem. The background is as follows
 
My gear: Win 7 x64, I7 870, 4Gb DDR3, Sonar 8.5.3, M-Audio FTU, Roland RD 300sx
 
I recently purchased a M-audio FTU. First problem was that my software would not work with the old FTU driver. Tried a few different things but in the end for ease I loaded the latest driver. Not great because now I have lost high performance mode in the FTU. However, the more confounding problem is the noise that I am getting during playback and record. Everything works and sounds fine with the Sonar 8.5 demos, but confusingly the tutorials sound like a flock of ducks being kicked (I get noise but extremely distorted). Also, if I open a new project, the same thing happens. I have tried inserting all the preloaded soft synths, changed as many parameters that I can think of but no joy. Next I tried with my existing projects, again no joy until I found a glimmer of hope, discovering a project that plays normally. This last project sounds OK (both playback and record, midi and audio), and I can insert new soft synths, change banks etc and all works. I have compared all the parameters in this project with everything else and I cannot see any reason why this one project will work while nothing else does. This means that currently the only way I can start a new project is to wipe all the midi and audio from the file and set it up as a template. It also means that if I want to hear my old projects that I have to try and cut and paste them into this one file.
 
The other thing that may give someone smarter than me an insight, is that if I use the FTU as a midi through and use the GM of my Roland to listen to midi playback, the midi sounds fine even in the projects that 'quack'.
 
I have run out of ideas (not that I had many in the first place). Any signposting to general solutions I could try would be greatly appreciated.
 
 
 

Thanks for this Beagle, but I am already in ASIO mode.

Cheers

Thanks Fireberd. The audio (analog) is fine, so indeed it seems isolated to midi. I jumped to the conclusion I was having an FTU conflict somewhere, but maybe this is not the problem at all. I am still confused about how to fix this problem, mainly because it is not a consistent fault. The two demos bundled with Sonar and the one project of mine works fine with all soft synths, but all other projects, templates, tutorials etc. still suffer from extreme distortion. Hopefully I will stumble across a solution.
 
Thanks for the advice.