Well, THAT is new !
ehh ...
I can imagine that you, after knowing this, found out more by now ?
Before I forget, does Engine#1 (or #2 for that matter) behave normal ? Careful, because you seem to use the digital volume, and no such thing exists in #1/#2 !
Highly pretentious : this might be the sheer proof of how XX influences the DAC. I mean, it really does, but this seems over the top. As said, highly pretentious, but the only thing I can imagine is that there's something wrong in the power supply area. I mean, this is not something which happens in the digital domain (or you must see Windows volume sliders going down automatically ... which are even out of order, so never mind) and since you say iTunes/Foobar just work ...
There is one other thing though, and this is Q1. You may have it too low or too high. I can't predict what happens where, but I think you should try some of its settings. Start with 14. Then 17, 20, and above that for USB it will start to go wrong (but never real silence afaik). Then 11, 8, 6, 4 and at that point again it may stop to work (in normal situations). If you can see that this by itself makes a difference, try to explain to me what you hear. Is it distorted (at a certain setting) and if so, how (glitches, ticks, dropouts).
If indeed the power supply is not 100%, give it a little rest at a next attempt. Pull out/in the plug in between is a good thing. Also, shortcut the legs of the plug for a few seconds when the plug is out (just hold a screwdriver against them).
Oh ... it may be USB powered ? in that case try to find a shorter cable to begin with. And another USB connection at the laptop. What counts for the power supply in the DAC just the same counts for USB and its power supply.
Btw, the log files show all is nomal and you just should have sound. But I guess we both can agree upon that now.
Let me know what happens !
Peter