Only gain can distort the signal. Volume can't. So, when you set your gain, use as much as you need, but no more. Rely on your volume control as much as possible it can't distort the signal no matter how much you turn it up.
You also have to be careful when mixing balanced and single ended gear. The 2 modes of operation are not compatible. I suspect your no sound problem may be due to comparability. What are you plugging the output of your preamp into? If you are using the balanced outputs, you need to make sure the input on the next component is balanced. Just having an xlr jack on the back of a component doesn't mean its balanced. Its just a connector. A lot of manufacturers short one of the hot pins to ground on the input, so if you plug a cable carrying a balanced signal into it, it immediately creates a short circuit. If that's the case, you may have a ready damaged something. Try the single ended outputs and see if it works.

