Have an IMac G5, after restarting following power outage internal speakers do not work. In system preferences the volume indicator is not highlighted thus unable to change volume. When volume on keyboard is used it shows at full volume, but there is a "prohibitive" sign underneath the volume bar rendering it nonfunctioning. External audio connected to stereo systems works fine. Any help greatly appreciated.

Since the problem occurred after a power outage, it would be worth trying to reset SMU.

I get that occasionally, and assumed that I had inadvertently hit some key-command. a log-out usually straightens it out.

When sound output is switched to digital sound out, the volume control is disabled and will behave that way when you try to change volume. Check system prefs to see what your sound output device is set to. I'd bet it either says digital out, or says you don't have a sound output device.

I saw this a lot with the first white macbooks where the audio jack would start thinking you had a toslink cable plugged in all the time and disabled internal speakers and would do that (/) thing when you tried to adjust volume. Haven't seen one of those in quite awhile.

If it doesn't see the sound hardware, you can try smc and other hardware resets (remove battery for an hour) but if that does not fix it, the audio hardware is probably damaged. Get yourself some USB speakers, they're cheap.