It's almost like (not that I know since I don't know how to read the code) Docky is rendering the icon for the zoomed-in zoomlevel, and then scaling it down for when it's not zoomed, such that a 48px dock with a 400% zoomlevel is displaying a 192px icon scaled down to 48px. The icons look perfect when zoomed in; it is only when not zoomed in that this behavior manifests itself.
It's almost like (not that I know since I don't know how to read the code) Docky is rendering the icon for the zoomed-in zoomlevel, and then scaling it down for when it's not zoomed, such that a 48px dock with a 400% zoomlevel is displaying a 192px icon scaled down to 48px. The icons look perfect when zoomed in; it is only when not zoomed in that this behavior manifests itself.