Adobe Presenter can not use audio output after 10.8 upgrade

Hi,
I just upgraded from Snow Leopard (10.6.8) to MTL (10.8). All went smooth apart from the fact the when I launch adobe presener (flash) over any browser in MacOS, it can not play the audio part. It used to with 10.6.8.
The problem persists after rebooting the Mac. Other Apps (iTunes) use the audio just fine. So, it's something specific to the path of code that Adobe flash is using (?). The funny part is that when I launch VMware Fusion and a Windows7 VM, I can use the audio for the same application. So, it's the MAC part that's broken. Any ideas? Maybe I'm missing an updated plugin or something?
regards,
Thanos

There's no change if I hold command-R to boot into recovery. The mac chimes on powerup but nothing else seems to happen.
The machine has an SSD drive in it so I can't even listen to hear if it is loading anything or acting differently when I try different keypresses.
As I had some spare RAM lying around, I've tried swapping that in but no change there either. I still suspect it's a software rather than hardware problem, but without any way to control the boot up, I'm not sure how I can fix it.
I do have remote time machine backups - is there any way of restoring these manually, perhaps by removing the drive from the mac and copying the backup data over using another system? (Unfortunately I don't have any other mac systems to experiment with this, though)

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