Garageband mushy underwater sound

I just purchased one of the new aluminum, 13" 2.4 GHZ Macbooks. I have tried recording my acoustic guitar on it and it will sound fine for about 5 seconds, but after that the sound kinda tones down and has this distorted, underwater sound to it. I looked in the help section and it said it should do this if I'm pushing the computer real hard (i.e. lots of tracks, not much power behind the computer, etc.) but it's the only application I have open and it's the only track I have recorded. I've messed around w/ the different levels of input on the mic, mono, stereo, the gate feature, they help a little but still after 5 seconds the sound distorts. Anyone who can help I would greatly appreciate it! Thanks.

So you're using a mic to record the guitar or is it DI'd?

Yes, using the on-board mic to record the guitar. I don't know what DI'd is. I've used and heard other recordings w/ just the on-board mic on previous models of iMacs and Macbooks and it sounds just fine.

Are you applying a lot of effects as you record? If so, try no effects, record, then apply the effects afterwards.

(DI is direct input, using the Line Input jack)

Garageband Mp3s sound underwater

I have the same problem. I recorded acoustic guitar into an open air mic with no effects. The tracks sound great in the recording window but the Mp3s have an underwater or strangely compressed sound.