Hello,
There are at least two potential causes of your distortion problems, quantization noise and distortion, and aliasing problems. If you are generating the replay output using filtered PWM this may also present additional issues.
Since you have the voltage divider at the input of the ADC, you will need to have a series capacitor so that the zero signal bias remains at Vdd/2. To prevent aliasing effects, especially with the low sample rate you are using, you will need a "substantial" analog input filter, so that voice frequencies of 3.9kHz and above are significantly attenuated, by maybe 30-40dB. The voice signal may also need to be subject to some compression to limit dynamic range, and have as high a peak input level as possible into the ADC, without exceeding the limits Vss to Vdd.
The use of 8-bit resolution (effectively 7-bits plus sign) is causing significant quantization distortion, especially when the signal level is low. With a linear ADC you will need at least 12-bit resolution. This resolution would also be necessary for the DAC used for the replay process.
Note that telephony applications that do utilize 8-bit data format actually use a logarithmic conversion process to enhance dynamic range for low signal levels.
Regards,
Mac