CRAZY RECORDING Audio Problem

I have a laptop that's audio is dropping just seconds into recording. Now I say the
audio drops, here is what is happening: Seconds into recording, the monitored audio
drops in tone, begins to distort and the visible recording wave flat-lines; shows
"no audio" even though you can still hear the distorted sound through monitors, laptop
speakers & headphones.

Now as far as input, he has tried CD players, mini-microphone, mixer input even the
laptop's built in web-cam mic; exact same result.
Also, the audio software he is using is something a a local University provided and
have also tried Audacity. Each and any program gets the same outcome.

Other than reinstall/update drivers for Audio and Chipset and checking the system's
Gain Stages; I am at a loss...
Nothing is reported in the device manager; clean as a whistle! Event viewer is clean
as well..... Any recommendations? :confused

P.S. Playing any audio on the laptop itself works just fine.

Computer's Specs:
4GB 800Mhz RAM
Intel T9600 2.8Ghz CPU
500GB Western Digital Hard Drive
ASUS HL90T Laptop enclosure/motherboard/LCD.

 

They are up to date. I apologize for how I worded all of that. I meant that is everything I have tried so far and don't know where to go from here.