Just tried to open Audio MIDI Setup. And I got an error
Process: Audio MIDI Setup 
Path: /Applications/Utilities/Audio MIDI Setup.app/Contents/MacOS/Audio MIDI Setup
Version: 3.0.4 (3.0.4)
Build Info: AudioConsole-95011000000000~1
Code Type: X86-64 (Native)
Parent Process: launchd 
Date/Time: 2012-02-02 23:51:13.199 +0400
OS Version: Mac OS X 10.7.3 (11D50)
Report Version: 9
Interval Since Last Report: 4261 sec
Crashes Since Last Report: 3
Per-App Interval Since Last Report: 7 sec
Per-App Crashes Since Last Report: 3
Anonymous UUID: AB2C7EFF-D9AD-43AC-BDB2-87E54719531A
Crashed Thread: 0 Dispatch queue: com.apple.main-thread
Exception Type: EXC_BAD_ACCESS (SIGBUS)
Exception Codes: KERN_PROTECTION_FAILURE at 0x0000000105100008
VM Regions Near 0x105100008:
MALLOC_TINY 0000000105012000-0000000105100000 [ 952K] rw-/rwx SM=ZER
--> STACK GUARD 0000000105100000-0000000105101000 [ 4K] ---/rwx SM=NUL stack guard for thread 2
Stack 0000000105101000-0000000105183000 [ 520K] rw-/rwx SM=COW thread 2
Application Specific Information:
objc: garbage collection is OFF
There is no sound in system at all.
I also have no sound after upgrading to 10.7.3. A reboot of my system after the upgrade solved it. TEMPORARILY!! Today, after my mac was off all night, I booted it up and it was fine. I left it running all day and when I returned to it after a day of working, there was no audio.
Whenever I try to increase or decrease the volume, there is a "DO NOT ENTER" circle with a slash through it (see screenshot).
I rebooted again, and now the problem is gone again. I have now booted into my recovery partition, ran Disk Utility and repaired permissions. Let's see what happens nnext. I'll update this post in a few days, if I see any change.
Tried installing the 10.7.3 combo update, still same strange problem, recap:
After updating to 10.7.3 if I boot having my external audio system jack plugged in there will be no sound available (volume control greyed on menu bar).
If I boot unplugging the jack, audio is available and fully functional for the entire session.