Yes! But only with an earpiece! I took it to the Verizon store figuring it's a KK bug, but they had not heard of this (of course). Then they tried a headset and it sounded okay. But back at home I tried three other earpieces and they all sound crappy. So then I tried booting into SAFE mode to see if that would make a difference, and the phone will not run in safe mode. The home screen quits continuously and I can't access any apps.
I suspect the update screwed with the audio gain structure or the echo-cancellation which led to this distorted audio with the earpiece. But no idea why SAFE mode doesn't work.