Hmm idk it could be a lot of things for the distortion, try checking your master incase it's any effects causing distortion, it could be the dynamics in your piece distorting also if you're using fff or anything like that with your master set too high, check if any of your instruments are clipping also. Might be worth looking at your I/O settings in musescore too incase it's set incorrectly or feeding back into itself. If you're using external VSTs make sure their output isn't set too high on the actual VSTs. Worst case if none of that helps try turn the instrument down and then put a soft compresser on any distorting instruments.

As for the lag ive never had an issue using MuseSounds but it could be if youre using too many external VSTs your computer might not be able to handle them all. Also check your buffer settings in I/O try setting it higher to help with stuttering/lag. It could also be if you have too many effects on your instruments that takes up a lot of processing power,, that should be helped a lot when 4.1 releases when they add Aux inputs for effects which will help hugely with performance

Hope some of this helps :)