"Yes, the computer which is no longer sharing internet after the update to 10.7.4 is a Mid 2011 iMac." WINS!
So yes, it's a Mid 2011 thing.
Bummer for the people with new computers!
Based on the number of people on this thread (not that many?!?!), my kind-of-informed guess would bring me to believe that another factor must be in play...something connected to internet provider/router...though I really have no idea.
If only there was a thread titled "10.7.4 - NO Issues with sharing Internet Connection!" Oh well...
Respect to the KEXTERS - nice. gonna play it out here, though, especially since there's a portable wifi router in the house. missing that speedy wifi connection a bit, though.
Funny thing about this update: it fixed internet sharing (via WiFi) for a PPPoE connected machine at work while breaking it for my machine at home.