Is it possible your Pop Pulse USB to SPDIF converter has deteriorated?
Sound Card Recommendations for the iMac
It looks like there is something wrong with the internal sound card in my iMac desktop. The music is now scratchy and mildly jumbled. Having eliminated every other possibility that I can think of - have others been required to replace the sound card and if so . . . .what did you get? Same stock part or upgrade?