Distortion at Peak Dynamic Levels

Do a forum search on sibilance.

Two great pieces of equipment you bought. I assume that you have a digital source and don't have the same problem with it. Aside from any really weird or very odd problem, the issue you are experiencing has something to do with your phono cart and/or your phono preamp. Its pretty safe to eliminate your Ayre because it has a passive line stage. It sounds like there is too much gain somewhere. Probably, the most common source for the problem is not having your phono pre on the right settings when using a high output MC cart. If this is the case, you need to use the MM setting on your phono pre and not MC, even though you have a MC cart.

Another thing it could easily be is your phono cart just not being broken in. More than any other component, phono carts need to be broken in. There's no question that a cart can actually sound defected/broken when they are new. It can take a good 30-50 hours of play until they stop sounding broken. Definitely put at least 100 hours on it before any critical listening.

I'm fairly certain one of the above is your problem. If not, list your entire system in detail.

I generally second ZD542's post. The most likely culprit is either (1) phono stage overload/slewing distortion, or (2) mistracking by the stylus.

If the problem is the latter, you may be permanently damaging your records. So you should investigate that first.

After making sure your records and stylus are really clean, try playing an offending passage whilst increasing VTF in tiny increments (like .01 or .02g if you can). Make several trials, increasing VTF each time. Does the distortion lessen as VTF goes up? If so, mistracking is the culprit. Eliminate it immediately by improving your setup, else you risk destroying your vinyl.

If raising VTF several times makes no improvement, the odds are it's your phono stage. Frankly, that's my bet. Many phono stages are incapable of reproducing powerful vocals or hard blown horns (for example) without slewing distortion. This can sound exactly like mistracking to all but expert ears. This can happen even if even if the phono stage is perfectly gain-matched to the cartridge. You should check that, as ZD542 said, but you may just need a higher quality phono stage.

Get a phono set-up test record, and check your cartidge's tracking. You may simply have the tracking force too light. Are you using a GOOD/accurate digital sylus force gauge? The Shure test records run you though a series of test levels, in various frequency ranges, which is more comprehensive than most. I'm still using my ERA IV disc, from the 70's. (http://www.ebay.com/bhp/shure-test-record) (http://www.needledoctor.com/Hi-Fi-News-Test-Record) All the Shures and the Hi-Fi disc have tracking tests. If you get a Shure disc: try for a NOS one. If a disc has been mistracked severely, it's probably permanently damaged and there's no way to tell visually.