I emailed M-Audio with the problem, and its very long winded, but to cut a long story short, I can't get my 1010 to simultaniously send and recieve digital signal. One or the other is fine, I just have to set the amster clock to internal signal or S/PDIF In, but both (i.e. digi out to my TC m300, and digi in from my TC m300).
Any ideas? I have a feeling hat there's a really obvious explanation for this one, which will earn me nomination for 'Lemon of the Year'