It sounds like amp to me too, but I think there are reports that they used a maestro fuzz tone.
Also, in the Jonathan Richman song, Velvet Underground, He sings:
"both guitars got the fuzz tone on,
drummers standing upright pounding along.
A howl, a tone, a feedback whine,
like biker boys meet the college kind"
I'd figure since he saw them live he might have some insight, but the next lyric is:
"how in the world were they making that sound?
Velvet Underground."
so maybe fuzz tone was just generic. I really like that song!