amplifying audio lm386 dumps negative part?
The short section of audio shown looks OK. It is suffering from clipping on both the bottom peaks AND the top peaks too. Clipping indicates that you're applying too much signal at the input. Such overdrive can result in your "awful" distortion. Don't forget that this chip has a minimum gain of 20 dB. And don't forget that any input signal extending more than 0.3v below ground is outside acceptable territory.
Those 220uf input caps are overkill, and might cause strange effects. I'd suggest reducing them to 0.33uf non-polarized types.