Slight thread necro, but I've been having trouble with dodgy front panel audio as well. When I first put everything together it didn't work at all - I found out it was because the plug for the front connectors (above the top 5 1/2" spot) had come loose while I was routing cables.
After a bunch of effort getting to the thing and pushing it back in, all was well. Then I changed motherboards and now have the same problem again - the headphone jack doesn't work at all, and the mic jack is sketchy. I think the plug has just come loose again, so you could try the same thing I did. You'll have to remove anything in the top two bays and then reach up and try to push the plug in a bit better - it's really hard to see and get to though.