Harvey,
If your shellac looks muddy then you left sanding dust in the pores. I have found that the best way to fill with shellac (I use super blonde) is to apply 2 or 3 heavy coats a few hours apart. Then I let it dry for a day or two. Scrap or sand it back to the bare wood leaving the shellac in the pores only.
FYI - wet sanding between coats can leave sanding slurry in the pores that will NOT alwaysdisappear when the next coat of finish is applied. Wet sanding is for rubbing out finishes not for between coat flattening.
Scott
Finishing is an 'Art & a Science'. Actually, it is a process. You must understand the properties and tendencies of the finish you are using. You must know the proper steps and techniques, then you must execute them properly.