[jigsawlogic]

This is a perfect example of the limitations of "popular wisdom".

A blanket statement, such as "set the gain lower than you think you should" only applies to people that set the gain too high in the first place. I tried taking that advice once, and was amazed how much better the guitar sounded...AFTER I deleted the lower-gain tracks and re-tracked everything with the gain set where I initially knew it SHOULD be.

It's impossible to take any advice as a general guideline without knowing WHO it's targeted at, and under what circumstances. In this case, it's targeted at people who have the idea that more gain=better rather than right gain=better. It naturally counteracts wrong tendencies in the first case, but confounds good ones in the second.

So if your ears tell you that your gain is too low, trust them. It might take some time and experience to hear where it sounds best, but this is often a matter of fine-tuning rather than the large-scale problem that you've identified. And I second what the other guys said about EQ.