Gary123, your findings are interesting. What chipset or sound card are you using? With the four or five sound cards that I've tried, (VIA, SB!, Intel, Crystal) on three machines (Athlon X2, P4, PIII) my best performance for recovered audio has been around 30%-40% C4FM.
woodpecker, on the first machine I built I put in a SB card to use as an input and attempted to use the motherboard audio as an output. dsdauthor indicated that the loading would be minimized using two cards. As you are now experiencing, I found it difficult to find the correct 'mixing' to make this happen. I also tried disabling the on-board audio from BIOS and simply running from the SB card. I actually found that the motherboard chipset had better audio.
I know I'm probably not any help with the audio issue/question, but for me it would be like the blind leading the blind. If I got on your machine I could probably play around in the mixer settings till I got it, but...
What I did do, which I now offer, is to advance all of the sliders in alsamixer (input and output) up to the first or second red block since I didn't know what affected what. Then, I went to the obvious input selectors (line1, line2, mic) and varied those to note any changes. Also, I toggled MIX setting between its various selections till I was decoding. I did find out that in the alsamixer, the "m" key mutes whatever you're selected on and the "space bar" selects an object to be acted on.
Also, when using alsamixer you have to put a switch in the command line to operate on the correct SB card, if you have more than one.
Example:
alsamixer -c2
To know which cards are available and what switch use, look in the /dev/ folder. There should be a icon labeled "sound" or "sound2" (or both). You can and should run two instances of alsamixer if you have two sound cards. So, open two separate terminal windows. In one window type "alsamixer" which will operate on the "sound" icon. In the other terminal window type "alsamixer -c2" to operate on the "sound2" device.