"maxed out" volume distortion...?

one of my dorky hobbies recently has been trying to clean up bootlegs. i have some files with some grainy distortion during the loudest parts of the song.

now i can’t really figure out which audacity feature is best for fixing this. noise reduction really doesn’t work because it’s not a constant noise, although compression seems to help a little for some reason. any suggestions?

I’m guessing that these are analogue recordings?
There’s not much you can do - You can try a bit of EQ to take some of the harshness out of the distortion, but that’s about it. This is why it is so important to avoid distortion in the original recording.

For digital recordings, clipping may be repaired with a plug-in called “ClipFix”.
I think clipfix is now included with Audacity 1.3.5, but if not you can get it from http://easyspacepro.com/audacity/plugins/clipfix.ny

This may also have some benefit for analogue recordings, but the problem is that analogue recordings do not clip the audio in the same way as digital - it is more of an extreme compression of the audio peaks, and depending on which components were causing the distortion it may also include phase reversal and other difficult to deal with anomalies.