Do you have some monitor speakers you could test the output on? Remember to check your mixer channels for clipping in Sequel.
If you are gaining the audio too much with the phones knob, the headphone amp could be damaged in your unit (as I suspect it is in mine.) If you turn the Phones knob down and there is no distortion, you have found your problem: the headphones. In this case, try a newer pair.
I assume you are playing the export with your CI?