Well it's cool that button kind of did something. Seriously, I still don't really know what it's for so you kind of tested it for me... lol.
However I reread your posts and I'm not seeing that you've adjusted you buffers incrementally. Perhaps I missed it or I'm not understanding your set up but...
Open whatever driver software came with whatever device you are trying to record and find where you set your recording buffers (check the manual). Lower it in increments until it starts making pops or causing freeze ups then turn it up to the last working setting.
If it's still causing delay from there then turn off all unnecessary internal effects. Still not working? Start "Freezing" your tracks that are necessary for you to get your recording done and "Archiving" any tracks that you don't need to hear at all.
Then start reducing your buffers in increments again until things sound right and you are a not having dropouts/pops/freezes/etc...
If it is STILL not working call Cakewalk support and ask them about optimizing your system and whether they know of any hardware conflicts with your gear.
You can also see if there are any weird resource spikes causing problems by running DPC Latency Checker which is free and will come up in a google search (Cake tech will likely recommend it).
Anyway... more shots in the dark but that's all I got. If I have copmpletely misunderstood the problem my apologies. Good luck.