Synchronize clips not working in Final Cut Pro

"Synchronize Clips" is not working properly. Usually I select the audio and video clips that I want to sync, select "Clip > Synchronize Clip" and voila, it's synced at the right places.

Now when I do the above, it merges audio and video at the beginning so NOTHING is in sync. It just started doing this after the new update. I've been using it for years with no issue and now it's not working. I've searched in Google over the last few days and have found no solutions.

I've deleted the App and reinstalled it, I've also cleared preferences and restored to default settings and still no resolution.

Can anyone help? I'm using FCP 10.7.1.

Thanks!