Attached some screenshots to help. Yeah I could record just the other day with audio and now suddenly it stopped working. I did nothing in the settings to cause it, just happened out of the blue. Other friends are having the same issue.
Did your system get a recent Windows update? Sometimes audio goes to crap (happens to me).
Go update your audio drivers from your motherboard manufacturer to see if it fixes problem.
Also, go to Windows Sound Panel and make sure:
1) The mic is enabled and is set to be the default recording device
2) The speakers are enabled and set to be the default playback device
3) Advanced settings are correct
Right click properties and check to see if the default format is set correctly in the Advanced tab for each device (channel, bitness, sampling rate)