OK, I finally figured it out. It has nothing to do with the recent security update. Some piece of junk application modified my audio settings. When I figure out which one, I am going to be writing a nasty letter to the programmer!
Here is the solution from Apple.
Anyway, I did learn a few things and found some nice codecs for QuickTime in the process.
AC3Codec.component
Apple – QuickTime – QuickTime Components
DivX 6 for Mac for Intel/PPC (Universal Binary) – Beta 2 | DivX Labs
XviD QuickTime Component
