Hi fellow sufferers.
I also reinstalled RealTek HD drivers to no avail. By a process of elimination using Sound Recorder, I found that if you leave Disable All Sound Effects unticked
, it brought back the levels, and if you deslect all the effects it reduced the distortion to a useable level. I have level on 100 with no boost. Windows speech recognition is now working fine on the built-in microphone (from two feet away) and also with a cheap (one pound) desk mic. With the effects on, it sounds like it was going through a phaser effect and very distorted. This sounds exactly like other users' descriptions.
My fix is to leave Disable All Sound Effects unticked
on the mic properties enhancements tab:
This is not tested on another system so please get back to me if you can confirm it or need more information. Turning on any of the effects just distorts the sound so I am wondering if that is indeed a driver problem.
BTW If you can't see all your microphones, look for the setting Separate all input jacks as independent input devices
under Device Advanced Settings at the top right of the RealTek HD Audio Manager in Control Panel, Hardware and Sound.
Hope this helps someone else.