The ThinkVantage System Update (TVSU link above) tool (10M) did the trick for my T60. It presented with exactly the same symptoms: no audio even when windows finds the card and shows that it is producing sound. The on-screen signals for volume level and screen brightness are also working and the sound has sustained a couple of reboots till now. The mute button on the laptop doesn't work like it should but I'm not too bothered with it right now. Thank you guys so much for the info.