Turntable with Phantom

[ogs]

Could this be because the digital section of the box runs off the 5V on the USB bus from the computer?

I don't think so. I checked the manual and it describes the process of connecting your PC to the device (quote see below). So I guess a computer is necessary.

Connection to the amplifier over S/PDIF
Use optical cable for digital connection to your amplifier. A computer has to be connected with A/D Phono Box S and turned on to activate S/PDIF output.
Following settings have to be done in Computer to achieve desired behaviour (example for Windows 7 and Windows 8):
Open Control panel -> Hardware and Sound -> Sound and open tab Recording.
Choose "USB Audio CODEC" and click on Properties. Open tab Listen check the checkbox Listen to this device and choose "Speakers (USB Audio CODEC)" as a playback device.  

Then it is double silly... The USB interface has to be enumerated by a computer to activate SPDIF.
The REGA Fono Mini A2D uses the same converter, a TI (BB) PCM2900B. The difference is that 2900B has no SPDIF I/O, while the one specified in the Pro-Ject, the 2904 has SPDIF I/O. I do not know if the REGA powers the 29xx from the internal supply or the 5V on the USB bus. I have sent a request to Pro-Ject asking how this is done.