I've been experimenting on my ME machine and was finally able to duplicate the problem AND fix it...
Let's hope this works for you, too.
Make sure you have a copy of the system.ini tucked safely away in your "My Documents" folder. Then open the system.ini file in the search results window by double clicking on it. Delete the line in red below and then press "Delete" again to remove the space it leaves between lines of text. Close the window, choosing "Yes" to save the change.
[boot]
oemfonts.fon=vga850.fon
shell=Explorer.exe
system.drv=system.drv
drivers=mmsystem.dll power.drvuser.exe=user.exe
gdi.exe=gdi.exe
sound.drv=mmsound.drv
dibeng.drv=dibeng.dll
comm.drv=comm.drv
mouse.drv=mouse.drv
keyboard.drv=keyboard.drv
*DisplayFallback=0
fixedfon.fon=vgafix.fon
fonts.fon=vgasys.fon
386Grabber=vgafull.3gr
display.drv=pnpdrvr.drv
SCRNSAVE.EXE=C:\WINDOWS\SYSTEM\3DPIPE~1.SCR
Reboot...you will still have no sound...
Search for system.ini again and double click on the file in the search results window. At the bottom of the [Boot] section, add the line
drivers=mmsystem.dll and press "Enter" to add a space between the [Boot] section and the section under it. Close the window, again accepting the change.
Reboot...do you have sound?