I run with an ASIO Buffer Size of 128 when recording, and do so with Input Echo On all the time, with no latency problems, so I am quite confused.
If you are running Windows 7, you can run either DPC Latency Checker or LatencyMon, and if you are running Windows 8 you can run LatencyMon. Both are freeware programs. You would download and run while Sonar is not running, for a 2-3 minutes, and then look at their analysis in the output, to get a feel for whether or not there is something outside of Sonar that is interfering with your DPC latency.
Oh, I am also running x64, with a Sample Rate of 48 k.
Do you happen to have WiFi?
Lastly, it sure sounds like something like an effect - something like a convoluted reverb, or Boost11 or that sort of thing. Someone above this had asked about what happens if you bypass effects ('E' on your keyboard), but don't recall if you had posted back on that having any effect on things or not.
I have to run - but will come back and read through the thread again when I get back.
Bob Bone