Can't fix ventrilo

I've looked through every ventrilo thread and found nothing like this problem. I went to the Ventrilo forums and found nothing either. I am really frustrated and really want this to work.

First of all I'm running Vista Ultimate 32 bit with an on-board sound card.
The sound on my computer and in games works perfectly fine.

Here's my problem.
I connect to Ventrilo, I get the connect sound. I push my talk button, I get that sound, I disconnect, I get the disconnect sound. ALL PERFECTLY CLEAR.

Now I go into chat, enable TTS and its all muffled. Same when people talk. I've turned up inboand and nothing changes, it still sounds the same. It almost sounds like the sound is under water or under a pillow or something.

I have the Windows 32 bit version 2.3.0
I tried running the server on my own puter and connecting to that, all the sound effects are fine but TTS and people talking is still muffled.

Now I checked to make sure that the codec was the same, but I also found something else that might be the problem but I'm not sure, because everyone else who is running it on windows can hear each other. And yes I'm running Ventrilo as administrator.

Here's what I found;
-Connected to server
-right clicked where ping is showing
-Went to View --> Server browser...
-clicked on server I'm on and chose Details (made sure my codec is same as it says)

Under Details is says;
Server name: The Core
Comment:
Uptime: 72 12:29:36
Platform: Linux-i386
Version: 2.3.1

But if this is the problem how come everyone else who has windows can hear each other? And how come when I had the server on my own puter it still did the muffled sound?

I compared my settings to that of someone else who is using Vista and they were the same, For input and output I just have DirectSound chosen.

Someone PLEASE help me on this. I am very frustrated with this. I feel like I've tried everything possible that I can besides reinstalling xp.