HA! I FINALLY FIGURED IT OUT!
Was reconnecting everything - was running a dry track via the input, and plugged the 1/4 into INPUT 1 L - as I was plugging it in, it sounded AMAZING. So much more body, richness - it actually sounded like a true amp should sound. I left the 1/4 jack plugged 3/4 in, and let the track play through for a while. Perfect.
Plugged the 1/4 all the way in, and there is was - thin, harsh, just cardboard crap tone. Not to mention a HUGE loss in volume. I can replicate the same behavior on Output 1 R as well.
I think I have a defective unit. Going to reach out to Fractal to see what they can do.