Hi atalwar, thank you for helping out.
Okay so I did in fact d/l audacity and created a quick "Sound Test", nothing fancy just strumming a G chord but after about 4 seconds you can hear the degradation and not a smooth/clean decay of signal...
Sounds like some modulation and intermittent noise on the tail.
Here is the link to the mp3
http://www.dansindel.us/audio/DI_soundTest.mp3**Not sure if this is common amongst digital recording but after years of recording with my Digi stuff I have never had a signal issue with the 002 hardware, so who knows perhaps it has something to do with the Toneport/ASIO side of things?