so you were playing the hh?
but the hh does not have a mute, it is fitted with a tune o matic, and unless you bening within the first 5 frets then it shouldn't fret out becuz of the compound radius. i.e. 9.5 at the nute and 12 at the heel.
9.5 is fairly standard for fender and 12 is fairly standard for gibson.
i don;t believe that the mute would even fit on an hh.
the mute does however kick up the pitch a bit,
its not something you can fix with a simple setup.
basically it is just a flawed design, i have found it handy if you tune with the mute engaged, but then thats really all you can do for the song is muted stuff or else it will be flat.
a friend of mine came up with a design that would probly work just as well as using your hand, but...... you can;t really go down the strat and have someone shape metal bits and peices right off the bat.