When something that shouldn't get hots overheats, the culprit is usually the VCC rail. Try measuring the voltage in the +5V rail coming from the power supply.

If the PSU is old, replacing the caps inside it will reduce the ripple. DC components can do nasty things when they have to deal with the AC coming out of a poorly-stabilized SMPS. You can also try hooking another PSU to your system. Some ISA cards will behave incorrectly because of the lack of a -5V rail in modern PSUs, so remove them before switching the system on.

If the PSU is OK, well, you can always get a cheap heatsink on eBay and attach it to the chip.

It's a brand new Antec Earthwatts 380w.

Multimeter shows 5v exactly...

Google only turned up a few instances of something similar... so maybe its just the chip getting hot from being worked?

Little update to this. Plugged in my Philips Rythmic Edge sound card and turned on the hardware exceleration. Chip got hot just like the sound blaster did.. So i guess nothing to worry about, just the chip working.

I'd still drop a heatsink on it to be safe. This old stuff just loves to burn out.

my Creative SB16 CT-1750 gets pretty damn hot.

Add the waveblaster II daughterboard and it gets even hotter.

I dont get any distortion though.

I got a similar setup, i.e. on desk/no case, and had recently started to hear this constant (low) background noise coming along with the regular sound. When I re-seated the soundcard it went away.

I guess the lack of physical support other than the PCI slot gradually made it lean too much or something.
But was no distortion in the music etc, just an added background sound(electrical noise), so maybe not that relevant for your problem (?).