Hi I've been using cakewalk for about two years - I was getting terrific distortion problems when recording the through the dirty channel of my Marshall vavestate - through the line out - in to the computer.

I recenly tried recording from my guitar through a couple of jack sockets straight in to the computer ( leaving out the amp ) - there is ample power generated in the pick ups for the studio to record - in fact I have to turn the Guitar volumes down.

You could check to see if the playback is red lining the meters or the wave pattern (visual ) on the edit screen is too wide...................Curious?

Cakewalk likes low volumes. I put the distortion on afterwards within the Studio effects - Amp simulation