Windows 7: Restoring 'Compressed' Sound following Skype

Hi,

I am experiencing some really annoying problems with my sound which arose after using Skype. Bascially, my sound (iTunes in particular) is now extremely 'compressed' (and sounds very 'tinny'- I am using speakers plugged into my laptop). Upon opening the 'Volume Mixer', it shows my sound is unable to go beyond about 20% of the bar (even though the level is set at '75'), and I'm not sure how to restore it to it's normal levels.

I can adjust the sound using the volume on the sound mixer and also on my speakers, but the sound quality does not improve to its previous levels, and neither do the green/grey bars on the sound mixer (although I understand this is a primitve method of judgement!). The grey bar (from above the green bar) has gone completely on the iTunes application sound control when playing music.

So far to get the sound back to normal and how it was I have tried:

- Under the 'communications' tab in 'sound', changing 'When Windows detects communication activity' to 'Do Nothing', from 'reduce by 80%'. I'm pretty sure this is what caused the problem in the first place.

- Updating sound card drivers.

- Changing the 'enhancements' under my my 'Speaker Properties'.

- System restore to before the problems.

None of this has worked and I have literally spent hours trawling the net looking for a solution, much to my increasing frustration. I hope I've explained the problem well enough for someone to be able to help find a solution. Thanks in advance.