MP4 files play just fine outside of Photostory on my computer. When I put them into Photostory, the video plays fine but the sound is unusable (crackling, buzzing). MOV files are all fine, it seems specific to MP4.
mp4 is what is termed a "container" format. Within your file there can be a wide variety of codecs in use. It is possible, though unlikely, that one audio codec within your mp4 is in some way incompatible with PS.
What audio driver is set in PS, under Program settings>Playback?
To give us more information about your actual video file please have a look at and follow this tutorial for an app called MediaInfo. Copy and paste here the results of its Text view and we may well be able to offer further advice to you.