Windows 7: Very low audio levels in Windows 7

Hey all, I've been having a very strange sound issue which I cannot fix at all.
I have all my volume levels maxed out however the volume meter only fills about 10-15% of the scale. I've tried for hours to fix this to no avail. When I click "Test speakers" the sound levels are fine, only for that.

Things I've tried:

Updating Drivers
Reinstall windows.
Reinstall windows on a different HDD.
Tried multiple audio devices, exact same problem with on board sound and with my sound card.
Tried changing the quality of the sound to DVD, CD, Studio etc, same problem with all options.
Disabling onboard sound in the BIOS, still same problem with my sound card.
Updating BIOS

I'm all out of ideas, nothing I do seems to fix it. I'm gonna try install windows 8 on another HDD soon and see if the same problem is present there.



(There is an example of my issue here http://www.twitch.tv/ianan90/b/333098221 at 1.50)
Any help would be greatly appreciated.

UPDATE
It seems to be only with "System Sounds" and Video Games, Steam etc.

Have you tried updating your drivers?

Yes I'm on the latest drivers, the sound worked fine until something crashed and I had a constant sound queue playing through my earphones which the only way to get it to stop was to restart my computer. As far as I know thats when this began to happen.