It doesn't sound that muddy, but I can't hear clearly cos there's too much fuzz, probably due to the fact no amp/speaker simulation was used. Btw, the 'urban legend' he was refering to is the point abt connecting your effects directly to line-in with no additional software emulation for amp/speakers. Most of the time you end up with something really fuzzy, as in your case.
You might want to specify whether it sounds muddy when you play normally on your Vox(not plugged into your PC) or when recording. As it is, I don't see why it should be that bad since you have an EQ. If adjusting your MT and EQ doesn't work, try adjusting your amp as well.