The Collaborative International Dictionary of English v.0.48:

Muddle \Mud"dle\, v. t. [imp. & p. p. Muddled; p. pr. & vb. n.
   Muddling.] [From Mud.]
   1. To make turbid, or muddy, as water. [Obs.]
      [1913 Webster]

            He did ill to muddle the water.       --L'Estrange.
      [1913 Webster]

   2. To cloud or stupefy; to render stupid with liquor; to
      intoxicate partially.
      [1913 Webster]

            Epicurus seems to have had brains so muddled and
            confounded, that he scarce ever kept in the right
            way.                                  --Bentley.
      [1913 Webster]

            Often drunk, always muddled.          --Arbuthnot.
      [1913 Webster]

   3. To waste or misuse, as one does who is stupid or
      intoxicated. [R.]
      [1913 Webster]

            They muddle it [money] away without method or
            object, and without having anything to show for it.
                                                  --Hazlitt.
      [1913 Webster]

   4. To mix confusedly; to confuse; to make a mess of; as, to
      muddle matters; also, to perplex; to mystify. --F. W.
      Newman.
      [1913 Webster]

WordNet (r) 3.0 (2006):

muddled
    adj 1: confused and vague; used especially of thinking;
           "muddleheaded ideas"; "your addled little brain"; "woolly
           thinking"; "woolly-headed ideas" [syn: addled,
           befuddled, muddled, muzzy, woolly, wooly,
           woolly-headed, wooly-minded]