It sounds like this is a combination of two things- a cartridge problem and perhaps also setup.
The cartridge could have been dropped and the magnet knocked out of alignment. This can cause all kinds of weird stuff while the cartridge looks fine. Since the muffled quality is in both channels this is a possibility.
I'm not sure how setup would cause the cartridge to sound muffled, but certainly it can cause mistracking, which manifests as ticks and pops in loud passages as the cartridge loses contact.