You can tailor the A3D sound to your liking with console commands.
http://web.archive.org/web/20021226223405/htt … hhelp/gm_hl.htm
The page also mentions the muffled sounds:
Several people reported problems with muffled sounds when Half-Life was first released. If you are encountering this problem, make sure you are using the latest A3D Drivers. If they do not help you, you can also adjust the console variables to these values:
s_distance 18
s_2dvolume 0.88
s_verbwet 0.15
s_min_distance 8
s_refgain 0.34