First I must give a big shout out to Will. His advice helped me think this problem through.
I did a hard shut down on my ZDAC and booted my computer up with the USB cable connected to the DAC, then I turned the DAC on and started playing a file to it. Nothing.... I then switched overr to my Ipod and music came out, wha hoo!
You must all understand that this morning I had carried the DAC out to my shooting range and hung it up to shoot it. I just couldn't pull the trigger on $875, that must be the first time in my life that I didn't do the impulsive stupid thing.
I'm now wondering if my first ZDAC had the same problem with it. It seems like there is just a little glitch in switching back and forth between USB and other inputs. For the time being I'm just going to use my Ipod.
By the way,the ZDAC-1 sounds soooo much better than the DAC in the Ipod.
I'm pretty happy now, I'm going to go out back and shoot a paper target before it gets dark.

Lon,
You wouldn't have liked the day that I got out of Laser Disks. One Pioneer Elite laser disk player and around 250 laser disks died a death that day. The player didn't play anymore and it was 10 years into DVD's so no one wanted the disks. So 3 friends and I had a great day shooting large silver disks and a big black box full of complicated looking things. Stupid, maybe, fun, hell yes.