It's digital clipping. This is a known issue with the UMC-1 so another unit will likely not fix the problem. I suffered from this and after some serious tweaking, found settings that work. Try these steps:
-Write down all the EQ settings for each speaker you got when you ran it this time.
-Reset unit three times and switch it off from the rear panel after each reset.
-DO NOT RUN emoQ!!! Doing so will set an offset somewhere that can't be tweaked.
-Manually adjust the EQ for each channel using the settings you wrote down.
-Make sure none of your speaker levels exceed 0. If so, adjust them all so they stay relative to each other.
-Adjust the Source Level Input to -10 on every input (in use or not)
-Set volume to 37.5 and run level calibration on the left speaker.
-Repeat this step until your SPL meter reads 75db. Once it does, write down the volume level it took to reach 75db.
-Take that figure and subtract 50.5. For example, if your volume read 45.5 when you reached 75db, the result is -5. If your volume read 52.5, the result is +2.
-Go to the Parameter menu and adjust the Dolby Volume Offset with the result in the previous step.
-One additional step you can try is ensure none of your EQ bands show wild swings like +9, -8, etc. If so, adjust the levels a hair up or down so they're closer to 0.
Keep messing with it for a few more days to see if you can get it to stop. The three settings that seem to affect this distortion are: Dolby Volume Offset, Speaker Levels, and Source Input Levels. All this said, my distortion would stop if I disabled Dolby Volume so if your unit is doing it with Dolby Volume off, you may have defective unit.