Audio in from Audio Cape clipped to 50%

Using a recent angstrom build
Linux beaglebone 3.2.34 #1 Wed Nov 21 14:17:11 CET 2012 armv7l GNU/Linux

I generate a recording using all default alsa configuration.
arecord out.pcm -f S16_LE

and the resultant file has values clipped to within a range of about ±17800 instead of full scale values.

Does anyone have any insight on this issue or know a better place for me to ask my question?

THanks much,