Windows 7 - AC'97 Sound (Microphone Device) Suddenly Not working

First post

OK, so here is my problem (Specs and Already tried solutions below):

I was using skype and my microphone was working perfectly. So, I go downstairs, get a drink and return. Only to find that my microphone is suddenly broke. Now it's not the microphone it's self, It works on my laptop, and I have plugged in 3 mics and they all render the same problem.

Basically, whether the mic is plugged in or not Windows reports that the mic is picking up sound (Green bar is FULL all the time). This happens on stereo mix, mono mix, line in etc.
My Audio however works fine. I have tried front and back jacks, no difference.
Although windows reports picking up sound, no sound is being processed (As tested through Skype, Sound Recorder and FRAPS). I did not change any hardware configs, as I went downstairs for literally 2 minutes. If I mute it however, the bar reduces to nothing (no sound being picked up).

Solutions that failed:

Re-plug in mic
Plug into another jack
Try different mic
Update Driver
Rollback driver
Delete driver, use driver sweeper and install driver
Disable and then enable in BIOS
Change the Sample Rate (Tried every single one)
Mute and unmute everything in the audio options and move all the sliders.
Turn Mic Boost on/off
Use windows troubleshoot (Found no Problem)

If somebody could please help me I would be so grateful. I am tearing my hear out in rage xD!

Specs:
Windows 7 x64 Ultimate
6GB RAM
HD 4670
AMD Athlon 64 x2 5200+ 2.7GHZ (2 Cores)
650W PSU


Thanks!

Unplug the mic and reboot. Plug it back in after Windows starts and see if works.

This may sound nuts, but are you sure the mute button on the headset itself is not engaged? This has happened to me on more than one occasion when talking on Skype. I get involved in conversation and accidentally engage the mute button on the headset.

I rebooted and now the green bar problem is gone. It wont pick up the mic at all now. Ima enjoy my christmas and then get back to this. Merry christmas all