I had the same problem with my internal mic. It was not listed as an option on the sound input panel. I solved the problem by going to System Preferences; clicking on "Speech"; then, under "speech recognition", choose "internal microphone" in the microphone menu; then click the "calibrate" button. Go back into the "Sound" panel and, hopefully, the internal mic will be an option.
I have to admit that I explored the rest of the options in the speech panel, but I believe that the calibration in the speech panel did the trick. I have external speakers for output and the mic now works great.
Theo 2