Note that this discussion has been updated and a we have discovered that there is a way to get all 4 PWMs working on the SIP module: Re: How many PWM channels available in BCM20732S ?
Regarding the distortion reported above, this was being caused by the clock selection on previous SDK versions as the clock being used for the PWM function was coming out of sleep. SDK 2.1 and later uses the LPO clock, so the issue with distorted volume is not present (i.e. this clock is always running).
The new pwm_tones application within SDK 2.1 and later has also added some comments which better instruct users on the correct utilzation of the PWM function.