No sound on Fedora FC3

For the last two days, I'm trying to find out why my sound card would not work on Fedora FC3. I know that sound card itself is fine because the other linux distribution on the same box - Mandriva 2005 LE - has no problems and when I was installing the Fedoram it correctly found my card:
ICH4 845G/GL Chipset AC'97 Audio Controller & I heard the sound.

I think problem started after I used "yum update" to install all updates which included a kernel upgrade to
2.6.11-1.27_FC3smp

I found out via "alsamixer" that all volume controls are muted by default and pumped them up to no avail.
Card is detected and drivers are installed properly:

[root@ahlnx ~] lsmod |grep snd
snd_intel8x0 35329 2
snd_ac97_codec 73145 1 snd_intel8x0
snd_pcm_oss 55153 0
snd_mixer_oss 22465 2 snd_pcm_oss
snd_pcm 92741 3 snd_intel8x0,snd_ac97_codec,snd_pcm_oss
snd_timer 28741 1 snd_pcm
snd 57765 8 snd_intel8x0,snd_ac97_codec,snd_pcm_oss,snd_mixer_oss,snd_pcm,snd_timer
soundcore 13217 2 snd
snd_page_alloc 13765 2 snd_intel8x0,snd_pcm

So? This sucks!