Hi, major fan and long time user, I have some audio issues I need help with.

For some reason now K-lite's sound quality is currently terrible on my PC!
It is muddy lacks range and almost sounds like it is underwater!

My expensive Gaming Desktop connected to my Bose AE-02 Headphone's via the optional cable, sounds so awful I can't stand to listen to any music!

I previously bought the latest Power-DVD, but got a refund as it was crap at handling a lot of my video content, refusing to play most of it! I forgot about this garbage, and forgot to un-instal it, I literally forgot it existed at all.

Yet where K-lite sounds like some warped creepy awful twisted version of music, Power-DVD sounds fantastic!

So why in the world is my favourite go-to software for more years than I can remember now providing me with such an awful experience?

I tried updating to the latest K-lite and it still sounds like garbage on the audio!

On my experience using K-lite since its conception:
I have used K-Lite for many, many years, and I always have it permanently installed, even going out of my way to promote it as an awesome product, installing it by default on my PC's I have worked on!
Sometime last year I noticed that Power-DVD had an edge on visual quality, so I tried it out. It was crap as it couldn't even play half my video library, so I continued with K-lite, loving it as a simple audio player as well, and now for some reason it sounds dreadful on my PC!

Since you are using an optical cable, does that mean that you enabled audio bitstreaming? In that case the compressed audio bitstream is end as-is to the receiver (your Bose) and the receiver is then responsible for the audio decoding and all audio processing.

Optical is also limited to AC3 and DTS audio formats. Everything else is decoded and transmitted as stereo PCM. So perhaps that is the problem. Getting stereo instead of surround sound. But apart from that it shouldn't sound like crap. That must be result of bad mixing of Windows / sound driver.

Looking at the specs of the headphone I see it uses regular 3.5mm plug or bluetooth?

I need to know more details about if you were bitstreaming or not. PowerDVD might have been converting stuff to AC3, which is also possible with K-Lite (details in FAQ)