Setting the sound level doesn't affect the people in town, they still talk with full volume.
Also a more curious issue, attacking monsters from afar makes their death sounds more quiet and ranged monsters attacking are completely silent.
muted_range.zip
The attached save is at a room full of goat archers.
Thanks for reporting. The dialog volumn should be easy to fix.
Did you have the volume at max when observing the issue with monster sounds? If not then it sounds like this from the release notes:
"Sounds fads too much over distance when the volume is lowered"
The volume is calculated by the engine, but probably the scale is different in our sound implementation (DX uses dB and I think SDL is a linear scale)
Sorry didn't notice that in the release notes, yes it was at a lower volume.
A good workaround for the time being is to set everything to max volume in-game and adjust the levels in the mixer on the OS. At-least that works on PulseAudio for me.
The dialog volume is now fixed.