Alright. It turns out the problem was not Growl at all. The file
com.apple.audio.coreaudiod.plist was missing. A file that runs
coreaudiod on system startup. Growl seems to rely on this for sound
notifications. Thus, sound notifications would not play.

I did resolve the issue by restoring com.apple.audio.coreaudiod.plist
to /System/Library/LaunchDaemons/

If anyone is having this problem and needs detailed instructions on
restoring this file leave a message here. Apologies for the false
alarm, it's such a strange and obscure OS X issue and I have no idea
how it happened.

Thanks

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