What a Star - MidiPlayer here I come!

The distortion I get is always associated with loud bass / drums and so I don't hear a high frequency crack, more like, the bass loses definition and turns into a sort of suishy thud.

If you look at the sound with an audio level meter (e.g. the monitor window in SoundForge) it is quite easy to interpret the display and realise that clipping is occuring. You have to set the recording levels so that the peak is at about -6db (so you know that the clipping is not happening on the PC) and then playback a midi file. If the level hits that peak before the part of the midi file that you consider to be loud, and stays there, then you can be sure you have clipping. Once the levels are adjusted correctly then the audio hits the peak very rarely throughout the entire song.

I've been thinking further about the issue. The problem Yamaha (and everyone else) will have working in the digital domain is indeed headroom. If you design your sound generation system around the possibility that someone is going to come along with a dense midi file with 16 channels of max velocity notes and high channel then, unless you internally limit or compress these high volume events, the amount of headroom you have to build in to cope with the peak means that "normal" sounds are going to come out really quietly and quiet solo notes will be inaudible. Therefore the generation system is designed with sufficient headroom so as not to distort in normal situations. And as a consequence really loud midi files will distort and need to be mixed down somewhat. C'est la vie!