Wow. Deck 2. I haven't used that in a loooong time. It might be worth it for you to update to a newer version (though Deck 3 was the last version that ran -well- on Mac OS 9. 3.5 is bloat city unless you're running Mac OS X).
Have you tried recording with any other software to find out whether it's a Deck issue or an issue with the 2496 drivers?