Thanks so much everyone for trying to help us get this fixed.
Taking apart the cover did fix both the mic and the webcam. I tried all the software changes, updated the drivers and followed the threads and to believe that it was a physical failure.
One thing I wanted to add was that when I first got the laptop I noticed that there was a pinging sound whenever the screen moved. I now realize this was due to the wedcam and mic disconnecting and reconnecting.