Got ya. I just got it a couple weeks ago so I'm still learning!
I have the original one as far as I can tell. So a 6581 SID. Top left here:

As said above by cTrix, the paddles are handled by teh SID chip.
As regarding the type, you can only have one specific type on your C64 depending on its model. You can't swap them. You will destroy the chip if you use the wrong one.

I don't know enough about them to answer that properly. It seemed like the older ones were better but IDK.
Why would plugging a controller in and having sound issues mean a broken SID? This worries me...

You totally can use both at the same time. This does look like a keyboard issue but then again, joysticks in port 1 will send keyboard data so maybe it has to do with a broken paddle but probably more than anything, a broken SID.

What type of SID you are looking for?

I know this is old but I was trying to find a SID for sale...
No solution here but I had the same problem with a controller plugged in.
I've yet to look into it but maybe you're not supposed to use both at the same time?

Does anyone know what to look out for if I open up the Commodore to see what's up? It's weird that it only happens when the paddles are plugged in, without them it functions perfectly.

Ive never owned a commodore, but from the way multiple notes are hitting id say you should check the keyboard itself for shorts....

this is what i do for my tablehooters, maybe not the same at all....i dunno

I'll open up the paddles and have a look to see whats going on, they seem to be working ok. But if the problem is an issue with my SID revision, is there anything I can do rather than searching for a new C64? Could I just replace the SID?

Thanks for your help!

Well, the A/D converters for the paddles are actually on the SID chip.  Because the paddles are a ramped value generated from an analogue pot they need that electronics to function .  SO I would assume that it has something to do with your sid revision.  I can almost bet that if you tried it on another revision of the SID it would be fine.

Are you paddles working perfectly?  If not it could be something shorting out inside one of them.  Which is scary because the SID is a very fragile chip!

After doing some testing, this only happens when my Commodore paddles are plugged in.

This is really baffling me!

I seem to be having a bit of a weird time with my new Cynthcart setup, 4 of the keys produce much thicker synth sounds compared to the others (please click the link below to see the video below to explain what I mean).

Does anyone know why this is happening?

http://www.flickr.com/photos/35508313@N03/5623824697/

Cheers,

O/H