Audio issue when recording into older Project !

Using Cubase Pro 8, I recently opened up an older project (created back in Cubase 7), but when I open up an audio track the mic signal sounds very weird, kind of thin & distorted !

If I do the exact same thing in a blank new project in Pro 8, it is all fine, but not in an older project.

Is there a fix to this, or will I have to recreate to whole project again in Pro 8 now ?

Note, I have tried exporting, importing tracks, but no success there either…just get an error message…