It could be head wear. Take pin 100 of IC 506 and ground it. If the distortion is equally bad then it is an alignment problem. Usual disclaimers apply - if you kill the D7, not my fault. Possible, but very very very unlikely.
Most AD converters are oversampling ones nowadays.
The filtering is done by a digital FIR filter. And then again, the aliased frequency of 54 kHz is around 10 kHz. Very hard to hear I have to say. This I also don't think so. Any form of nonlinear modulation will result in harmonics of higher order, not lower.