Issue with the sounds direbats make not being directional and not reducing with distance (I get within range and they sound like they are 1 foot directly infront of me).

Were the sounds exported as stereo? (if so, its an easy fix using audacity)
(from another forum, "I figured out the reason. Looking through all of Minecraft's sound files, I noticed they were all saved as mono files with only one sound channel (instead of stereo with 2 channels, one for each ear). I think this is the reason why all of my sounds, which were all exported in stereo, always play in both ears with no spacial awareness")