Hi,
Regarding the state of the mute LED, try the following.
Download the IDT Audio installer on the link below and save it to your Downloads folder.
http://ftp.hp.com/pub/softpaq/sp48501-49000/sp48945.exe
When done, open windows Control Panel, open Device Manager and open up Sound, Video and Game Controllers. Right click the IDT device and select Uninstall - you should also get a prompt to remove the current driver, tick the box to allow this and then proceed with the uninstall.
When complete, restart the notebook.
Let Windows fully load - it will automatically load an audio driver, but just let this complete. Then open your Downloads folder, right click on the IDT installer and select 'Run as Administrator' to start the installation. When this has completed, restart the notebook again.
The On-screen display for volume etc is supplied by HP MediaSmart SmartMenu which can be downloaded from the following link.
http://ftp.hp.com/pub/softpaq/sp48501-49000/sp48552.exe
When this installation has completed, you'll need to restart the notebook.
Regards,
DP-K