Monitoring recording - Doing something wrong. (Workaround found)

I have been trying to record my electric dulcimer in Sonar Platinum (If you really want to know about the dulcimer see here)
 
Everything is fine until I turn on input echo to monitor what I am playing. Things then get very distorted. There is no indication of any levels clipping and you could roughly discribe the sound as "underwater". This occures with or without effects in the FX bin.
 
The direct monitoring mix on my Quad capture is set to play back so the is no direct input signal to be mixed with Sonars output.
 
With or without the input echo on I get a good clean recording so the problem must be in the way I am monitoring.
 
I can use both Guitar Rig and Amplitube in stand alone without any issues.
 

Thanks for the detailed reply. I seldom record audio but in the past it has either been a hardware synth or from a microphone. In these cases I have always used direct monitoring from the Quad Capture.
 
I was atempting to monitor through Sonar so I could hear the effect of a amp sim while playing. I assumed this was something many electric guitarists do as a matter of course. As it seems that using input echo on the Sonar audio track is problematic is their another way to acheive this?

The input echo'd signal that's going from the interface to Sonar, being processed and back out again will be delayed compared to the signal that's just going from the Quad Capture's input to its output. This is because DAWs take more time to process audio than the direct from in to out function of the interface. The result is you get to hear it twice, first through the interface's own direct route then from Sonar.

To hear the amp simulator processed sound first turn off direct monitoring for the relevant input in the interface. This is usually done in the software that comes with the interface. Then enable input echo in Sonar on the track(s) you are recording to. There will be a delay between playing and hearing the sound, called "latency".

So long as the latency isn't too high most people can handle the lag without a problem. This usually means getting the total round trip time through the DAW to around 10 milliseconds or less (when the lag will be about the same as standing 10 feet away from the amplifier you're playing through).

The latency can be adjusted if necessary by changing the ASIO buffer settings, but if it gets too low for the system to handle then the audio can break up, crackle or drop out altogether. There are quite a few computer tuning tweaks which can be applied to try and reduce latency, the most important one of which is usually to disable any wireless networking in Windows device manager while using Sonar (or any other DAW).

If you run into problems with latency searching this forum should come up with a lot of information, or if stuck, ask for help.

What happens if you set up a new project with just one audio track with no sends and going straight to the master bus, add no amp emulator and no plugins at all then play the guitar through Sonar?

Does the distorted whatever-it-is happen then?

Edit - shouldn't the quad capture mix knob be fully left (counter-clockwise) to silence the inputs? It's also possible an input may be being routed to an output in the Quad Capture's own software mixer.

Honestly, it sounds like a driver issue to me. I've had weirdness like this with my M-Audio Fast-Track Pro. Maybe try updating/reinstalling the latest driver? And does anything change when you adjust latency/buffer size?

I will look at the suggestions tomorrow, but I can confirm that the recorded track is clean with none of the delay and distortion on the monitor signal.

Is your input 1 set to the correct input type (Hi-Z/guitar or line in)?