Static in Audio

I'm having problems with static in my audio channels during video playback of H.264 movies on my new iMac (MC309LL/A, running latest version of Lion).

This is not distortion, nor a cable issue. I've also used multiple audio encoders to no avail.

Interestingly, the problem does NOT happen on my 27" 2010 iMac running the SAME OSX version. The same movie sounds great on that machine. This leads me to believe that there is a problem with CoreAudio drivers possibly on my new iMac?

This is a critical issue for me as this iMac is the main video playback machine at my work.

Thanks in advance for any help.