Finally..I made progress!
I switched from Dolby Bitstream to Linear PCM.. I could not believe my own ears when I quickly jumped back in-game battle. No muffled sounds, clarity and rawness from weapons and bullets everywhere. And the echo? Well the echo is now present where one would expect echo to occur! No shallow,metallic,reverbing of the sound, making it unbearable.
The console is noe feeding raw PCM stereo into the Mixamp, everything sound alot better and more natural... I am getting more confused along the way. Oh well, as long as it sounds heavenly better than before
I actually had to check if the Dolby mode was activated
The soundstage is now more like how it was when I had surround and headphones activated in-game, but with the Dolby-mode off! But with significantly expanded soundstage! Too bad I am off to another graveyard shift