Hey this has been driving me nuts - Any Youtube window would lock out my screen.
Updated to 10.7.3 and no help.
I use Google Chrome browser and the Adobe Flash thing did not need to be updated.
HOWEVER it did need to be updated for Safari.
Not sure if there's a true cause & effect here, but I updated my Flash via Safari, emptied the Trash, restarted, and now Youtube DOES NOT LOCK THE SCREEN in Chrome or Safari!
One side-effect was I lost the connection to my Wi-fi, but I was able to reconnect easily.
iMac 27-inch, Mid 2011
Processor 3.1 GHz Intel Core i5
Memory 4 GB 1333 MHz DDR3
Graphics AMD Radeon HD 6970M 1024 MB
Software Mac OS X Lion 10.7.3 (11D50b)