Guess you may have found an answer now, but still. Had the same problem with music added on my imovie project. Played perfectly good in iMovie, iDVD preview and on my mac after completing the DVD. But on my DVD player it sounded like crap, like my speakers where blown out.
What worked for me was making sure the volume was not too loud before I exported it from iMovie.
I use iMovie 11. On the music clip I adjust the volume so that it is under the horisontal line, and the graph is all green. If the graph gets over the line it turns yellow, and at the peaks it turns red. I also used normalize on the clip (this may be enough (??) it lowers the the red peaks, but not the yellow).
Hope this is helpful.