I was able to switch the speaker cables and reproduce the problem in the switched channel. All inputs were having the same trouble. The problem would go away briefly after I cycled the power on the reciever. I sent the unit to Outlaw and they were not able to reproduce problem, but changed a component that was thought to be the problem.
In the meantime I started using my NAD 314 amplifier. I started noticing that the volume in one speaker was slightly lower than the other (not the same channel that was problematic with the Outlaw). When I turned the balance entirely over to this channel, the sound was heavily distorted. I switched the speaker to the other channel and the problem seems gone.
I also have speaker wire that is run under the floor through the basement. I'd like to be able to test this wire as well to make sure that this is not the problem.
based on these three statements, it seems to me the problem may be in your speaker cables?
in the first statement in this quote where you say you "switched the speaker cables" and reproduced the problem in your switched channel, does this mean that you used entirely different speaker cables? or did you switch the L and R speakers on the same run of cables? if the latter, did the problem follow the speaker to the other channel or did it stay in the same channel?
i think that somewhere along the line, the negative and positive runs to the affected channel are coming into contact. i guess this could be happening inside your speaker. I think that most amps will shut down when the polarities are crossed, don't they?
if you have not tried connecting the speakers with runs of separate cable, this may be a good way to test...just get some cheap monster cable and see if you reproduce the problem. my apologies if i misread your post and you already tried this, i wasn't exactly sure of your testing process.