Tinnitus is a problem that affects a diverse range of people. One common trait amongst people with tinnitus is the presence of hearing loss, which is apparent in over 90% of the cohort. It is postulated that the remainder of people with tinnitus have hidden hearing loss in the form of cochlear synaptopathy. The loss of hearing sensation is thought to cause a reduction in the bottom-up excitatory signals of the auditory pathway leading to a change in the frequency of thalamocortical oscillations known as thalamocortical dysrhythmia (TCD). The downward shift in oscillatory behavior, characteristic of TCD, has been recorded experimentally but the underlying mechanisms responsible for TCD in tinnitus subjects cannot be directly observed. This paper investigates these underlying mechanisms by creating a biologically faithful model of the auditory periphery and thalamocortical network, called the central auditory processing (CAP) model. The proposed model replicates tinnitus related activity in the presence of hearing loss and hidden hearing loss in the form of cochlear synaptopathy. The results of this paper show that, both the bottom-up and top-down changes are required in the auditory system for tinnitus related hyperactivity to coexist with TCD, contrary to the theoretical model for TCD. The CAP model provides a novel modeling approach to account for tinnitus related activity with and without hearing loss. Moreover, the results provide additional clarity to the understanding of TCD and tinnitus and provide direction for future approaches to treating tinnitus.