Interesting. Is it correct to assume that you are using ASIO4ALL as the Audio Device driver?
No, the Asus device comes with an ASIO driver. If you want to use the same device for input AND output then the Steinberg Multi Client driver is needed, which acts as a sort of router for the driver. Then rather than specifying your output device in the Zone you want to play, and the input device in the Open Live dialog, you set both to be the Multi Client driver, having previously configured the driver on installation with your true ASIO driver.
I guess it might be possible to use ASIO4ALL instad of the Multi Client driver? i.e. point ASIO4ALL to the input device, and output to the original ASIO driver, would that work??
Is it correct to assume that when you start Open Live you select ASIO Line-in?
Yes, and the dialog then asks you which device (ASIO driver) you want to use. But as mentioned, when you've done it once it gets listed in Playing Now as an item which you can then add to a playlist and incorporate it into views, so from then on you can select it as a track from Playlists or your normal views, wherever you've decided to put it, rather than selecting it from the pull-down menu again and OKing the dialog.