I have X2 Producer 64bit and a Focusrite 18i20 interface.  I get clean sound when using any soft synths that came with producer.  However, if I use any external VST, i get serious distortion.  The distortion increases exponentially with the number of notes played simultaneously.  This didn't happen when I initially installed these VSTs, so I probably did or changed something.  As a newbie, I have no idea where to start looking.
 
Any suggestions would be appreciated.

Sounds like you're clipping. Is the output from your VST really hot (high signal)?

You could try turning down the gain nob some. If you turn down the gain nob on the track and your problem goes away, clipping might be the issue.

That was the first thing I ruled out (should have mentioned that).  The distortion is there even if the gain on the VST is almost off.  Turning down the track gain doesn't help either.
 
I think the "offending" VSTs are 32-bit.  I'm running 64-bit X2.  Could this be the cause?  I guess I can install the 32-bit version and make find out.  But I doubt it since these VSTs all worked fine when I installed them.

hmmm. I definitely don't have this problem... so.. how would I trouble shoot?
 
If you route the signal you plan to send to the VST to a bus, you can check the level on the input to the bus..
route that bus to another bus and put the VST on it.
 
What VST are we talking about? All non-Sonar VSTs?
 
We need some path through which we can try to isolate the issue.
 
I suppose it's isolated if you click the power button on the effect -- turning it off -- and the distortion goes away -- click the power button -- distortion returns. Right?

What are your PC Specs?
 
Are you using ASIO driver model? (like in the sound settings in preferences, did you pick ASIO?).
 
Thanks!
 

As gswitz said, definitely check your drivers under "Edit" > "Preferences" > "Playback and Recording" > "Driver Mode", and make sure you are using ASIO. Also check your soundcard setup. I came back to Sonar recently and had distortion on VSTs, and this was the cause. Sonar defaulted to WDM. I was surprised to hear distortion because of this, I would have expected latency or dropouts.

Thanks for the feedback.  Here are the specs and settings (maybe overkill)
 
Computer:  HP H9-1170 - AMD FX-8150 Eight-Core Processor 3.6 GHz with 10 gig ram - Win7 Home Premium
 
Playback and Recording settings:
Driver Mode:  ASIO
Dithering:  Triangular
 
Use Multiprocessing Engine
Use MMCSS
no other boxes are checked
Command audition length:  3 seconds
 
ASIO Panel
USB Buffer Size: 10ms
ASIO Default Sample Rate 44100
ASIO Default Buffer Size:  32 samples
ASIO Input Latency: 22.5 ms
ASIO Output Latency: 22.5 ms
ASIO Total Latency:  45 MS
 
I will also check with Focusrite to see if they have any suggestions.

Open up the MixControl panel (the driver controller for your FocusRite) and check the buffer size...if you are really only using 32 samples that might be the problem, although I would expect much smaller latency. I have a much less powerful (on paper) computer than you Core Duo 3GHz with 4GB RAM, and I use the 512 sample buffer setting...getting ~25msec round-trip latency. 
 
In the panel, pull down <Settings> and look for <Latency> (set to Medium) and <Buffer size> (set to 256 or 512). These should be 'safe' settings with tolerable performance. 
 
I have a Saffire PRO 40 and it is pretty touchy about the 'sweet spot'
 
Also, when I upgraded to X3, it didn't copy my settings perfectly from X1 (set drivers to WDM), and I had some problems before some nice person here on the forum pointed it out;...funny that I actually fell into the old habit of hitting the Wave Profiler button, without realizing that this is NOT an ASIO function....duuuhhhhh

OldGuy
 The distortion increases exponentially with the number of notes played simultaneously.

You can be getting CPU over-loading as per dealing with 'soft synths'.
 
Looking first outside of Sonar for---anti-virus software or any other terminal and stay residential software (HP installs apps to monitor your system)---disable wireless/Bluetooth---disable built in sound card--your video card is not primed for game playing (turn-off 3D accelerators and stuff)