The problem turned out to be that somehow an empty /etc/modprobe.conf file had gotten created. Apparently if that file is present, then the files in the /etc/modprobe.d directory are not loaded (unless /etc/modprobe.conf loads them explicitly). So I could change the files in /etc/modprobe.d all I wanted without any effect.
Once I deleted /etc/modprobe.conf, things worked again (including sound).
Michael
The same thing happened to me on a new Sarge install.
The thing that gave me the most headache is hotplug/alsa kept picking up my onboard audio as slot-0 so all my apps were using that instead of my SBLive card. Only way I was able to resolve it was to disable the onboard stuff in the BIOS. There may be another way but I couldn't find it.
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