I had this issue with every client, my stereo mix worked just fine on other programs and not second life. WELL I fixed the issue and guess what I did?
Go to Control Panel\All Control Panel Items\Sound
go to the recording tab, right click your Stereo Mix and go to properties, rename the device from Stereo Mix to something like Microphone 2. Restart the second life voice process and IT WORKS! Obvious someone is trying to block the stereo mix device and did it by name