I found the culprit!! I had a stereo 1/8" to stereo RCA connector coming out of my M-Audio Sonica connected to my AUX in jacks. Upon disconnecting this cable, the buzz went bye-bye!! The Sonica also has a optical output that is working fine.

Oh well, hopefully buzz does not return. Thanks to everybody, especially soundhound and charlie, for their ideas. If one of you guys wants to post the reasoning why that connection caused the buzz....