I always thought that you need a true connection (3 wires) to make a real balance connection
A balanced connection is two signal connections and a shield, with a differential receiver detecting the voltage difference between the two signal connections.
Terms like "true connection" have no technical meaning, so are not very useful when trying to discuss connection issues with other people.
To address what I think you were trying to convey, there are two (and a half) primary ways to create a balanced output.
The first is what you seem to think of, which is two active output drivers such that the hot and cold pins both have signals of opposite polarity, and have the same output impedance by way of having identical circuitry driving each pin.
The "half" of the 2-1/2 ways is with an output transformer, which results in aproximately the same signal output impedance for each signal pin, and the same common mode impedance from each signal pin, but the level symmetry between the two pins depends on the transformer winding geometry (so may change with frequency depending on winding symmetry, style of primary drive, interwinding capacitance, and other factors). Not relevant to your Orion outputs, may or may not apply to some of the 500 modules.
The impedance balance method of creating a balanced output has an active driver only on one leg (typically the "hot" pin) and the other signal pin uses passive components to match as closely as practical the output impedance of the driven pin.
That results in induced noise being the same on both signal connections, which allows the differential receiver to ignore or partially cancel the noise and just amplify or pass through the signal (signal being defined as the transmitted voltage difference between the hot and cold pins). Simpler construction, and no concerns about grounding the cold signal lead if you connect to an unbalanced input.
That is a lot of background information, but may become useful if you get to the point of putting a 'scope on some of the connections.
That is what I am trying to figure out whether it is an input or output issue??
Do you have a headphone amp, or a second audio interface, or some other device you can connect in place of the Antelope inputs? I understand that just swapping in another device might be a little difficult if the patchbay has direct 25 pin D harnesses to connect to the Orion, but hopefully you could find a way to put another device in the middle (maybe where the 500 modules connect?) and get some information about signals coming and going.
Is it also possible that if power in the 500 chassis is not evenly distributed or underpowered for each slot, could that cause these issues
Low voltage or unstable voltage would be more likely to cause distortion, although I suppose if the 500 modules was intended to change level, like a compressor, fluctuating power supply voltage could cause some surprising effects. That would not be my first guess, but replacing the 500 module with something else (even just a pass-through cable) would help eliminate that.
In fact that would probably be the first thing to try, before even trying to get another device inserted to check the output levels, just put a straight cable that takes the place of the 500 module, so there is no processing, the signal just goes Orion->patchbay->cable->patchbay->Orion
That should right away narrow down whether the problem is just in the Orion and patchbay, or also involves the 500 modules.
