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you do not have a hardware issue, you have a windows issue. i had a similar situation myself and resolved it by "taking ownership" of a registry key. (weird)
sorry i forgot the exact details.
however a windows service not starting means its windows not hardware . .try a little googling . .

 
You can get PCI Express Audio cards, much the same price as PCI. Just qualify PCI Express when you search... Looking back I'm wondering if there could be a Windows glitch causing the error. Might be worth trying to run sfc /scannow from Command Prompt (in Windows as Administrator) This will check Win files and attempt to correct errors
 
Try this
Go to:
Control Panel > Administrative Tools > View Local Services

This is the "Services" window, it lists all the system services. Look for "Windows Audio" NOT "Windows Audio Endpoint Builder"

[just click on any service, then press the letter "W" on your keyboard, it will take you to the services starting with the "w" letter]

Right click on the "Windows Audio" service and choose "Properties"

You will see 4 tabs, click on the last one, labeled "Dependencies"

In that tab, you will see the "This service depends on the following system components" box, it displays 3 services

Beside each service there is a "+" icon, click on it to expand the list. The 2nd service will have 2 child services, the 3rd service will have 1 child service.

Now make sure that all the 6 services (3 main, 3 child) have the "Started" status in the "Services" window you opened earlier

Most propably you will find one of those services are not running, just start all of them, then try to start the "Window Audio" service from the "General" tab.


 
Seems you'll have to find the Audio Service! If the file scanners failed the only recourse is the Windows Installation disk, now I know you could do an upgrade of Vista to fix Windows without affecting files, but don't think that applies to 7. That means a clean install I'm afraid...
Edit - I'll try on my system to see if an upgrade possible..
Audiosrv is the registry entry for Windows Audio, so don't understand how it's missing from list of local services...