Hi, Mark.
I noticed this message when searching for information on speakers through Google. I know it is quite some time since you wrote this message, and hopefully you now have a possible solution.
However, I would say that many amplifiers, including Cambridge Audio ones, will begin to distort around the half-way mark (i.e. 12 o’clock). This is, from what I know, quite normal for British-designed amplifiers, which includes Cambridge Audio’s amplifiers and other products of these, of which I have quite a few. I must say that I’ve never managed to get my Cambridge Audio or Arcam amplifiers anywhere near half-way – far too scary!

They do not distort because I cannot bear to get them that far! LOL
Also, different music – rock, pop, jazz, dance and the way in which it is recorded and mastered in studios – can affect volume, bass and treble levels. Depending on what you play at any given time, it is quite possible for things to effectively go wrong at different points on the volume control. Also, CD players have a higher output level than, say, a turntable, so the point at which distortion will be heard when turning the volume up will be met sooner.
You may have done the right thing with your soundcard’s EQ, although I would try switching that off completely. Also, make sure any volume controls and bass and treble controls in your computer’s settings are set to their default levels, or somewhere in the middle if you experience problems with the defaults.
To improve the sound from your soundcard even further, consider buying a Cambridge Audio DACMagic digital-to-analogue converter (called a “DAC”) on eBay. You can sometimes snap these up for around £30 and right up to around £80. Try to get one of the DACMagic 2 models (2i or 2 Mk2, the latter being the best), not the original 1. The ‘2’ models have optical and coaxial inputs that will work perfectly with your computer (if you have digital optical or digital coaxial outputs on your computer). The DACMagic will take the sound data from your computer and convert by using its own chips, which are much better than those used for sound in your computer, and make a much clearer and smoother sound that your amplifier may get on better with. It should sound much better!

An even better model is the ISOMagic, but they tend to go for well over £100.
It sounds complicated, but I can assure you that DACMagics and the ISOMagic work very well indeed, and they can even be used for music from your computer as well. Everything will sound much better.
Secondly, different speakers, different amplifiers and different sources (i.e. CD players, computers, etc.) all behave differently when used together. Note what I said earlier about CD players’ output levels – they tend to be pretty ‘loud’. None of these issues are indicative of faulty equipment, although I can understand what you’re saying.
I did have a pair of Eltax Monitor III speakers, and they are very good in my opinion and are the smallest bookshelves capable of going almost into subwoofer levels of bass that I know of. My cousin has them now because I needed to clear some speakers out – nothing wrong with them at all. Unless these is serous buzzing or crackling at relatively high level levels – say, at 10 or 11 o’clock on the volume control – there may not be anything wrong with your setup.
Try using different sockets on your amplifier (not any marked “phono” if you have a phono module fitted inside your amp) and different cables. Also, if the sound is poor with your soundcard but not with anything else (e.g. a CD player), then you need to look at adjusting your soundcard. However, I would say your problems probably centre on what I said in the first few paragraphs.
There’s nothing wrong with your setup in terms of performance because your amp and speakers offer genuinely good performance and are not too be sniffed at.
I hope this helps.

You probably sorted this all out months ago! hehe
Regards,
Carl
