I Have an iPad 2 and have the same sound issue after updating to 7.1.2
Alert sounds ok
pandora, Music, other music apps work through headset, but not the speaker.
if you go to the Music app, the volume slider is dimmed.
is NOT the mute button.
every once in a while it will work but then just stop while playing
when you click the volume buttons the bell comes up and it says sound effects
since the speaker works with the alert sounds, speaker works.
can play though headphones
i've played with every setting possible. Has to be 7.1.2
i also got the freeze for two hours while updating and was forced to reset to get out of it.