An update on fixing the problem:
After the original fix in which I deleted both iTunes preference files I began to use iTunes again, including changing settings in the software equalizer. The problem returned.
This time I deleted only the equalizer preferences file, the one named "com.apple.iTunes.eq.plist", without touching the ""com.apple.iTunes.plist" file.
When I restarted iTunes the problem was gone so it's clear that, at least in my case, it's the use of the equalizer and the corruption of its prefereces file that is creating the distortion problem.
After the original fix in which I deleted both iTunes preference files I began to use iTunes again, including changing settings in the software equalizer. The problem returned.
This time I deleted only the equalizer preferences file, the one named "com.apple.iTunes.eq.plist", without touching the ""com.apple.iTunes.plist" file.
When I restarted iTunes the problem was gone so it's clear that, at least in my case, it's the use of the equalizer and the corruption of its prefereces file that is creating the distortion problem.