Poor iPod Playback via MDI

Hoping someone can shed some light on this issue for me. When i play my iPod (Classic 160GB) through my MDI the sound is poor. When i tried it in my wife's car through her MDI it plays fine and similarly in my dock through my AV receiver in the house. Both MDI's retrofitted with plug-and-play looms.

My initial thought was the MDI itself as the radio (Bolero) audio is fine and audio played via SD card. I've copied some songs from the iPod to USB (same format as iPod - m4a) to play through the MDI and to SD (converted to mp3) to try through the radio itself and both sound perfect. This is where i'm confused - USB via MDI play fine, it begs the question why is the audio poor from the iPod?? The iPod does restart periodically when left in my car but not noticed it do it when used elsewhere - going to leave in the wife's car and see if it does in hers to rule out that as an issue.

I guess the next thing to try is to swap the MDI's over but i don't know what (if anything) this would tell me??

Scanned with VCDS and no issues showing.

Any help/thoughts greatly appreciated.