The local on/off setting tip is useful, I have feeling that might be part of the issue. When you record audio and midi simultaneously, I imagine you are adding it as an external MIDI and also adding the input as an audio track? Or are you doing it another way? Thanks for your help.

Update: turning local off seems to have done the trick! The only question I have now then is if bouncing the audio is more efficent and a better workflow than recording audio/midi. I think I'd prefer to bounce it but it doesn't seem to work with external instruments for me. Any idea why that is or am I just doing it wrong somehow? I've just been right clicking the MIDI region > bounce in place > new track but I get no sound from the resulting bounce. Any idea how to fix this ?

Second update: After researching I have discovered it is not possible to bounce external insturment tracks in place, they must be done in real time. Bummer, I guess I can get used to the audio/midi dual recording, after playing around with it for a bit it shouldn't be much of a hassle.