I wanted to directly address the question of distortion.  Here is a set of measurements of a T50RP (Green), an Alpha Dog (Red), and an Alpha Prime  I made this morning using our standard production test fixture, which overstates THD, as you will see below.  These units were grabbed from inventory and I made one and only one set of measurements on one set of each phone, no cherry picking. 



When we use our in-house test fixtures, our worst case results look like the red or blue.  There is a spike that can occur at 500Hz; it is random on Fostex drivers and is not affected by our tuning or processing, and it is almost entirely second order and therefore relatively benign.  On about half the headphones it is totally absent.  I suspect it has to do with driver alignment to the magnets or within the driver frame but we have not found a way to isolate this. 

That said, we have done extensive listening tests and this is not audible to us with music so as long as the peak is narrow and under 2% it’s considered a pass.  For those of you familiar with Innerfidelity’s measurements you know that many TOTL headphones have at least one spike that pops well over 1%, some as high as 10%, so this is neither unusual nor something we consider a problem.

When we measure on a G.R.A.S. 45CA we find the THD measures improve.  Green and Blue = Prime, Red = TOTL Dynamic headphone, >$1K USD (it's a well regarded product I'm using only as a reference so it'll remain anonymous but the results are consistent with Innerfidelity).  Further, at 90dB, the Prime's THD, aside from the 1-2 peaks, is ~0.2%, which is extremely presentable for a genuinely closed can.

From our tests it's clear that better measurement systems reduce measured THD, while marginal or low quality fixtures add distortion that is not present in the actual signal, so it’d help to understand exactly what you’re using when you measure.