Arecord: pcm_read:2103 read error: input/output error

Yes, at this point I think it could be a hardware issue. But, to be sure I would suggest to again the MATRIX Creator/Voice Hardware Test from a clean Raspbian installation, if you have already done it let me know.

Thanks @yoelrc88 for helping us out.

The result @mooncaptian got was done pretty much from scratch (from stock raspbian).
@mooncaptian could you confirm?