Well, this is ironic. Hey man, did you ever figure out what your problem was?
I just installed a new soundcard on one of my computers, and it is doing the EXACT same thing, I think. Everything is running through the line in....when I play a DI'd guitar through a preamp into the line in, I can hear it fine...when I double click on the meters, I'm getting good levels...
....BUT AS SOON AS I HIT RECORD, THE LEVEL METER GOES TO NOTHING AND IT'S NOT RECORDING?!?!?!?!?!!?!
WTF?