Built in sound stopped working

I've had the same problem with my MacBook Pro 17" after upgrading to Leopard and it continues with Snow Leopard. Resetting PRAM restores only the startup chime and then it the sound output stops. Headphones work fine and the headphone output shows up in the sound preference pane. When headphones are unplugged the preference pane only shows the digital sound output.

If this is a driver issue, the driver seems to disappear on it's own.

Any other thoughts out there?