Hi ppls, HELP! I too am experiencing the same problem with my s706 purchased in Japan. Well it first started with me thinking my headphones were bad, which they actually were. Got my replacement NC022's and they worked fine for some time. But do to delays for the replacement, in the meantime i purchased a Cowon D2 w/a pair of shure E500's(which is pretty awesome). Then my battery died out one day so i decided to use my sony. To my dismay, crackling noises from both headphones were very apparent along with just total horrendous sound. Thought it was my headphones, but I plugged in my shure's and it was the same. So i think i have concluded my player as totally unuseable! which sux... It was awesome as a primary and even a secondary player!! Love the noice cancellation feature and the EQ is top quality. It feels like such a trajedy to have this baby sitting on the shelve. So basically i was wondering if you guys found any solutions on how to fix it. I believe the problem has somethign to do with the headphone out output. I'd warranty it but i high doubt sony USA would accept it, as being a model made for and bought in Japan. I have the warranty card and box and everything but i need to go searching for the receipt. Any helpful suggestions appreciated!!