I'm leaning more toward the simulcast distortion potential. LSM or simulcast distortion typically manifests itself by either garbled audio or no audio. Particularly if you have a number of talkgroups programmed and you miss all of them, including those that probably aren't encrypted, such as Public Works type TGs (which can be found with ID Search On).
Encrypted talkgroups, such as those that are AES/DES, are skipped (as in not holding) and you see ENC displayed briefly. Other types of encryption, such as ADP, you'll get audible noise (nothing intelligible).
Along with the above suggestions you may try setting the site attenuator to On, or if your scanner is mobile, try to go about 1/4 mile from a known transmitter. If you get audio there, that confirms LSM distortion.