We do not have the problem as you mentioned. The FXO port of OBi110 is pretty good. Perhaps, you may do factory reset your OBi110 and followed by using the default values to make a call to someone to check again to see whether the voice is okay or not.
For the same setup, if the power to your OBi110 is disconnected, use the phone connected the OBi110's Phone port to make a call to somesone to check if there is any echo found. Also check the voice volume if it is okay.
I have experieced the same problem when I use my NOT Qualified corded phone to make OBiTalk call to other people, I can hear echo. For ordineary phone like cordless phone they do not have this kind of problem. This is may be due to the automatic gain control in the coreless phone.