It sounds as though you're clipping.  (Actually I think the default
settings will clip for lots of people.  Sorry... I'll change that in
the next build).

Try setting the "gain" value in the configuration file to -15.

More detail:
http://inguzaudio.com/usage/config/

The DSP is completely linear (apart from clipping).  The steps you see
are the clip-recovery algorithm: every time it hits clipping within a
half-second window, the DSP reduces its gain by 0.5dB, until the pain
stops.


-- 
inguz
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