I know it seems to make no sense, but you have to lower the "Quality" slider at the bottom to medium setting. The 2 highest setting are bugged, and work for very, very few people. Put the slider in the center, exit the game completely (a VERY important step- the changes don't effect until you do), and restart Guild Wars, and the sound glitch is gone.
Basically position 3 (center) is the way sound was before Anet "improved" (sic) the 3D sound.
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