You simply can't play louder than that. Could be a number of things:
1. If you're raising on the Ipod, you could be overloading the pre-amplifier in the speakers. Raise the volume on the speakers instead.
2. The amplifier is clipping. Nothing to do but to turn it down.
3. Your speaker drivers are clipping/bottoming out. Nothing to do about that either.
4. If the speakers are old, the caps could be on their way out (=weaker power supply), and thus limiting your volume. If this is the case, they probably make a 100Hz buzzing noise all the time when they're on. Take them back to the shop and have them replaced.
The idea of any hi-fi system is to reproduce the source material as faithfully as possible, and to deliberately add distortion to everything you hear (due to amplifier deficiencies) because it sounds 'nice' is simply not high fidelity. If that is what you want to hear then there is no problem with that, but by adding so much additional material (by way of harmonics and intermodulation) you have a tailored sound system, not a hi-fi. -
Rod Elliot, ESP