Thanks to everyone for the replies. It got me on the right track to figure out what was going on. Perhaps I should have provided more information about the situation in my initial post so I'll share my results in the event that someone else might find it useful.
I was trying to record a performance using a Korg M3 with Karma and drum tracks running. A total of 6 tracks/channels, 4 karma, 1 drum, 1 keys. I also have local control on. Although unusual when using a DAW, turning local control on is a requirement for recording Karma to a DAW.
As I stated before the recording and playback worked fine but the meters were not showing any activity. So when I turned input echo on as suggested the meters responded. Unfortunately that also created midi feedback and everything was now playing double. There was almost no noticeable latency but it was enough to increase the volume and cause a small amount of distortion. It was distracting enough so it was not really usable like that.
My final solution was to add a soft synth that was initialized to produce no sound. I routed all the midi outs to the silent soft synth while recording and turned input echo on. I could directly monitor the sound as I was playing through the main outs of my Motu 896, the midi meters were all active and everything recorded perfectly. I changed the midi outputs back to the M3 for playback and all was good.
I'll admit that this is one messy kludge but it seems to work. Thanks again to everyone for pointing me in the right direction.