I've had this happen.
It definitely went away by just switching sources or powering down though. You pretty much described EXACTLY what's happened actually. It's an awful sound. It didn't sound damaging, but it's pretty "noxious".
Oh the joys of 1070 ownership...
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Model 1070
Toshiba HD-A35 & Pioneer BDP-51
Tivo Series 3
Elite 50" / Aquos 32"
Squeezebox Radio
Stereo Setup:
NAD C326BEE (50Wx2)
Elite DV-47Ai Universal SACD/DVD-A
Citypulse DA7.2x II + TXCO DAC
B&W 685s
JL Fathom F112
Denon AH-D2000 Headphones