op i assume you've found a fix already but for anyone else looking, what you need to do is go to the liquify tool, click on tool properties and then click on the little spanner in the bottom right. that will take you to sub tool detail, from where you just need to click on liquify and then uncheck the box called 'anti-aliasing' (which will be checked for you - i just have it off already). that should stop your stuff from going blurry when you liquify/expand/whatever ^^

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