My nexus 7 had similar symptoms. Found a fix over on XDA - take the back cover off (youtube can help) and then lightly press on each speaker. One of my speakers had popped up (the black acoustic cover prevented me from seeing this though). It very noticeably popped back into place.
Sounds MUCH better. Still get distortion at 100%, but it is much better than it was.
Sounds MUCH better. Still get distortion at 100%, but it is much better than it was.