@widemediaphotography : IMO no need to complicate it. There are two conditions for a ground loop effect on audio device to occur:
1.
The cable shield of an unbalanced cable is the very point where the noise is actually created, that's the thing you have to understand.
Pefectly said. I would just add - the shield forms a return channel for the unbalanced signal, where the noise current adds up to the signal return current, creating noisy voltage on the receiver-side cable terminals.
2. A noise current must be actually running through the unbalanced return channel (the shield), i.e. a voltage difference between both sides of the unbalanced analog-signal return channel must exist. That's not obvious at first sight.
E.g. :
A) Your case (IIUC): earthed PC -> earthed (class I) USB DAC -> unbalanced analog -> amplifier: Very likely there is a noise ground-loop current throught the GND wire/shield of the digital-signal USB cable. But it does not affect return channel of the unbalanced analog line. If the amplifier is earthed (class I), a noise ground loop current could run through the analog-cable shield, but why should there be a voltage difference of GND between the DAC and the amp? There are no large currents running through the DAC GND traces which could create this voltage differential.
B) Another case is rather common: earthed PC -> unearthed (class II) USB DAC -> unbalanced analog -> earthed (class I) amplifier: Here the ground-loop currents run through the USB GND AND through the unbalanced analog shield (return channel), creating noisy voltage between the receiver-side terminals of the unbalanced analog connection.
C) The case above can be fixed with a balanced line instead: earthed PC -> unearthed (class II) USB DAC -> balanced analog -> earthed (class I) amplifier: The noise ground-loop currents still run through the shield of the balanced analog cable, but the shield does not serve as return channel for the analog signal and the created noise voltage is not added to the analog signal being transferred.
If only the amp has balanced inputs, often a simple passive unbalanced-balanced cable can turn the case B to C, eliminating thus the ground-loop noise effect.
Of course breaking the continuous ground connection with galvanic isolation solves the issue too.