I'm getting some weird grounding issues with my system. Any static discharge on my headphones/DAC/amp/computer (which is connected to the DAC via a USB converter) often causes my music to skip momentarily. Even ESD through my desk does it sometimes (and my desk is not electrically connected to my audio setup).

One time, a particularly strong discharge caused my USB converter device to be unusable until a reboot.

Anyone have suggestions on what to do? My apartment's flooring is all wood.

I've seen this with improperly grounded input connections to a spdif receiver. Can you post a picture, or a schematic, of the dac's input section?

Here is a picture inside the DAC. The SPDIF input is right in the top center.

Other than that little green wire being suspicious, I'd doubt that the DAC is the issue. Maybe the USB to spdif converter? what happens if you connect to the dac with a usb to toslink connection instead?

Is your wall grounded properly, and does everything, including the dac, have a connection to safety ground?

Other than that little green wire being suspicious, I'd doubt that the DAC is the issue. Maybe the USB to spdif converter? what happens if you connect to the dac with a usb to toslink connection instead?

Is your wall grounded properly, and does everything, including the dac, have a connection to safety ground?

I think it was better when I used computer directly to DAC, using coax. Didn't test that configuration's sensitivity to ESD thoroughly. Everything I have uses 3 prong plugs, and my surge protector's lights seem to indicate that the AC is properly grounded. It doesn't specifically say "ground OK", but the two LEDs for "protection present" and "line OK" are both lit.)

Is there a chance of permanent damage?

I'm not sure the surge protector would be able to test the ground? Do you know how your apartment is wired? If it is conduit, then by default it should be grounded via the conduit. If romex, then you should see a ground wire inside the outlet going to the box (I believe). If you look inside an outlet, be careful.

You could pick up a tester such as [url=http://www.acehardware.com/product/index.jsp?productId=2665480&CAWELAID=109389922]Sperry