The physical phenomenon responsible for blurring of images is
the so-called spacial low-pass filtering. When the same
phenomenon is applied temporally to sound, sound loses its
higher frequency content. The only legitimate meaning of blurry
sound I see then is when there is so much echo or physical
obstacles for sound to go around that it loses clarity.
Therefore, sound heard in a large echoic chamber (like a concert
hall, hangar or cathedral) can be physically blurry, and sound
that you hear from behind the wall when someone is speaking
there can be blurry as well. Sound contaminated by interference
(like bad radio channel) would be considered noisy, not blurry.
Also, this type of sound would not be considered distorted.
Distortion (I'm in danger of getting overly technical here), is
a different phenomenon, characterized by non-linear effects,
e.g. you speak too loudly into a microphone and it clips, or
when you encode audio with very low quality, that's an example
of distortion as well. Blurriness would be