Keeping the Port volume control on Variable?

Yes. If successful you’d simply be using the old passive control as a fixed attenuator between the CD player and the Line-In.  Normal volume control would be in the Port. 

Well by golly it worked!  Perhaps it was that 3V versus 2.2V output on the unbalanced that was causing the issue. Thank you so very much!!!

Excellent. You can note -- or even mark -- the volume position on the passive control, then tuck it away somewhere safe out of sight.

I really appreciate your time and problem solving on this one. It was driving me crazy!

What did the volume control setting on the passive control need to be at?

I just turned it up to full and adjusted via the volume control in the app. No distortion. I also have the Source Level at 1. I'm not sure if I should consider making that higher. Any experience in all these variables?

I actually just tried backing it down a bit and adjusting the volume higher in the app and I think it's clearer

Full should mean zero attenuation and the control is being bypassed, effectively. It is worth a shot at now trying to remove the control leaving the CDP connected directly to the Port with NO other changes. If the distortion comes back, just wire the controller back in.

If things are working fine via either of these routes, and you are getting enough sound levels with the Source level at 1, there is no need to move that around. If you want to play around you will see that as that level is increased, the volume slider level on the Port will have to be reduced a little to get the same sound levels. 

Maybe a dumb question-it's still best to keep this in Variable, correct?  I've read people say that the sound quality is better in Fixed and I'm not sure if this current set up would enable that (or if you believe it really does improve the sound quality)

1. You can’t use Fixed. Your other sources (Pandora etc) need a volume control.
2. Some criticism was levelled at the Port’s digital out in Variable, owing to some internal digital signal processing. This doesn’t apply for the analog out. Variable is fine.

Fixed would mean that the only way to change volume levels is via the passive controller. Quite inconvenient.

In general if you get the sound levels you desire without having the volume level on a Port in variable mode to be set at less the 50%, sound quality difference from Fixed mode will not be audible.

PS: and yes, as pointed out, for using sources other than the CDP, the Port needs to be in variable mode.

This is rather a digression, but I suspect you may be conflating a couple of issues.

On the digital out, a volume level of 25% or more ensures that truncation on the 24-bit S/PDIF doesn’t begin to erode the 16-bit resolution. On the other hand, when I tested it many moons ago I found that Port needed to be kept at 85% or less to stay away from the effects of the soft-knee limiter. In other words the 25-85% range appeared to be the sweet spot for the digital out when Variable.

As for the analog out, these digital output considerations don’t apply. A decent analog output level does of course help with the downstream SNR. 

Here is an attenuator. My concern with this particular model is that it can physically stress the jacks unless you insert it between two cables.

I just know that a combination of higher output level from the source and a lower volume level from the downstream amp gives better results than from the same sound levels obtained by a combination that is the opposite - where the source level is low but the amp volume is turned up to compensate. I am not sure if this practice is relevant where the downstream amp has no volume control but I suspect it may be and it can’t hurt I think.

I have also found that keeping the amp level low by keeping the source level high helps in reducing start up speaker thumps from amps that cause these.