Sorry about the double post! I pushed the button twice

You said that it's a standard Shure XLR cable. Do you mean the one that came with the mic? I'm asking because in the online specs for that mic it says that it comes with an XLR-->1/4" TRS. And if that's the kind you're using it could be the source of the problem (I'll spare you the technical details for now). So if in fact you're using that kind of cable, suggest you use an XLR-->XLR instead. Phantom off.

The cable is an XLR--->XLR. The model, I believe is the 2nd gen one. I can get good levels with the guitar. And now im starting to think that the spike at max is normal because of the overload of input. It's just that with the mic you can barely get anything out of it until max, at which point it is clipping. It has to be the mic, right?

It's really hard to say for sure. Start by swapping out the cable. If that doesn't make a difference then the problem is either the mic itself, or, an impedence mismatch between the mic and the interface.

I had the same problem with another m-audio interface - the fasttrack pro. I couldn't get any signal out of any mics (i bought another one because I thought the first one was stuffed!) until the dial was up full, then it would spike. I found a few theories online about why, but no solutions unfortunately. As well as what Ski says I suggest you try the mic out on another type of interface if you can. Then at least you'll know if its the mic or the interface, and can make some decisions from there.