Anyone care to tackle the comment made previously about the signal out of/from the PIC chip? since it was mentioned that all this other stuff means nothing if that source signal is no good?
Well, I did. It's not that it's "no good", just that it is what it is. If it's clipped/over-amplified that's a matter you can take steps to address, but beyond that, you cannot transform square waves and pulses into pure sine waves.
What is the sound quality compared to your other amp (better/same/worse)? (If it's like the one I'm thinking it is, that's LM386-based, too.)
Maybe give that input capacitor (ac-coupling cap), the one between the source and the pot, a go.