Are you saying you can plug into the laptops headphone jack to get line out?
Try selecting a different sound device as the default.
I have only one audio device listed: Speaker/HP (Realtek High Definition Audio) and it is the default. My recollection (I no longer have the Windows 7 laptop) is that the Windows 7 setting change affected the routing of audio specifically when the HDMI bus was engaged. My sense was that I had the option to designate the HDMI as a video/audio output for the blu ray drive or as a video only output with the audio going to the laptop's internal speakers or headphone jack.
Thanks for your help.