The most likely culprit is that the Acoustica Noise Reduction is on and has a bad noise print.
The software uses a noise print to remove or subtract noise from the music. In order to work properly, it needs a good noise print. If the noise print is music and not actual noise, it will sound warbly.
1) Stop play back if it's currently playing.
2) Click the "Show Noise" button.
3) Right click on the noise print and select "Play Noise Print"
The noise print looks like this:
4) If you hear music in the noise print, try auto finding the next noise print by clicking the "Next Noise" button
5) Now try playing the noise print again by right clicking on the noise print and selecting "Play Noise Print"
6) If it is still sounds like it's under water, verify that it is the noise print, by changing the current effect to "<No Effect>". Try playing back the recording and if the under water sound goes away, it is definitely the noise print.
7) You can manually set the noise print by dragging it around. Just click on one of the blue triangles and while holding down the mouse, move the mouse left or right. Alternatively, you can right click and select "Set As Noise Print"
8) Keep playing with it until you find a noise print that is just noise and does not have music in it.
9) If you really need to remove the noise, you may need to record the tape or LP again and, this time, try to record some tape or record noise so that the noise reduction and noise print will work properly!