Audio Devices window - shows No audio device and the the device volume and speaker settings are greyed out

In the volume tab in Control Panel/Sounds and Audio Devices window I have the win default sound scheme set in the sounds tab. In the audio tab it shows No audio device and the the device volume and speaker settings are greyed out.

When I manually try to play a windows sound in the Sounds tab I get an error message that says my sound card may be in use.

Answer

Check Windows services.
Right Click My Computer and Manage.
Choose Services and Application
    Services.
        Choose "Windows Audio" and set to Automatic and Start.

I had same error after automatic windows update.