Why is my sound distorted as the volume is increased?

Speakers are a moving part so they can fail. The two things you might encounter is something was spilled into the system (wet or dry) that got into the speaker or is vibrating from it.

I would start off by making sure the system was dusted out and if any screws were found loose tighten them down or if drifting about find were then need to be put back.

Give the system a try then, also try an external speaker which you know are good. Is the sound distorted with them as well?