One more thing: besides the optical output, I've also got a headset
plugged into the back panel. When speaking into the headset, I can
actually hear myself through my speakers (which are connected via the
problematic optical output).

So it seems that only sound playback is affected, but not the loop from
microphone to optical output.

Any ideas?

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https://bugs.launchpad.net/bugs/704401

Title:
  Optical sound output breaks on upgrade to linux-
  image-2.6.35-25-generic

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