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Sorry if I shouldn't be reposting this. However, I think this is a very crucial issue and I'm afraid it may be burried inside the Video/Audio discussion.
I spent over 2 days on this, and summarized my findings here: Recording System Audio - Need Expert Adobe Assistance per Communication with Soundflower Device
I have yet to chat with Adobe Support; but will do so tomorrow.
I called Adobe Support and was given a solution (not optimal, but alright for my system audio recording needs).
I documented the solution here: Re: can't record system audio on mac for software demo using sound flower
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I called Adobe Support and was given a solution (not optimal, but alright for my system audio recording needs).
I documented the solution here: Re: can't record system audio on mac for software demo using sound flower