Norrie,
I'm splitting my head trying to think what could be causing this; really odd video ...
Assuming you checked all the complex issues, maybe we need start getting Mr.Murphy out of the picture. So here some basic questions:
From your description I read that everything works fine with either unit (VS-700, Octa-Capture) for ASIO buffers greater than 64, but below that light show starts. Did I get that right? What happens if you run at the lowest buffer that is OK, but then load the system heavily? Does the light show start up, or do you just get drop-outs? I'm asking cause that "reduce CPU load button" sort of hints that some internal buffer or the USB buffer bandwidth might be a bottleneck.
I assume you still have a true USB 2.0 port on that new MOBO? 3.0 is known to cause troubles. Tried sticking some 20€ USB 2.0 PCI card in there?
Is everything set to same sample rate settings (drivers, Sonar, VS-700, Octa-Capture)?
What happens if you use a different software (e.g. Kontakt player) and run that at low ASIO buffers?
I assume the situation persists with only the VS-700 & PC connected, but all other cables removed, including VS-700C?
Could you post screen dumps from latency mon, drivers tab, sorted descending, healthy higher buffer situation vs. light show??
Rob