iPhone 4s headphone's distorted, but line out is fine.

So my iPhone 4s has an issue with audio playback using the 3.5mm jack.

Whenever I use headphones the audio is extrememly distorted and crunchy. Although when I switch over to a higher impendence device (like line out to a stereo system) the audio is perfectly fine.

I'm not sure if it's an issue with the iphone's Pre Amp or what not.

Also when using Apples earphones the play/pause/volume button does not work (Sleeve pin).

I guess I would love to know if this is a Hardware issue or an iOS bug.

Cheers,

Julian