"... there is a half second gap between each digit dialing in the software"

That's a bit long, isn't it? How long are the actual digits?

From your schematic, I think the amplitude of the tones may be too high. They certainly are for the European standard.
Try changing the resistor between the output of the chip and the input of the op-amp from 10kOhm to 15kOhm.


Rob.