Audio inputs are 1⁄4-inch unbalanced connectors. These inputs accept line-level inputs
Audio output are 1⁄4-inch unbalanced connectors. These are line-level outputs and should
only be connected to line-level inputs of other equipment. Audio connections should be
made before powering on the unit. By default, the LP1 is configured to pass the audio
input with almost exactly the same level at the output. However, when multiple loops are
running simultaneously or after an overdub, it is possible to overdrive the output
converter. In this case, it is recommend that you reduce the Master Level from the ALL
track menu. A setting of -2 is usually sufficient to guarantee that this type of distortion
does not occur.
Hit the ALL button
are you talking about the internal output gain of the LP1, not sure if I ever found the access to it but will check again...
select Master Level Hit Enter
set it to -1 ( at level 0 there's a strong likelihood of distortion
as you build up tracks).
then forget about it.
Charles is of course right that it's nothing to do with impedance,
and what you are experience is just a level matching issue.
The LP1 is not an "instrument level device", it's a line level device
which runs at what is usually called "consumer audio" level,
some way between the old -10dB standard for consumer audio and
the +4dB pro audio level which is standard in studios.
Anyway, you seem to be sorted :-)