nihakue 
ramones 
Ashley SOLVED!! <img src="smileys/smiley4.gif" border="0" align="middle" />
I finally found out what my problem was (and possibly nihakue's).
My Windows audio speakers were set as 5.1.
I could only listen to a couple of channels through my headphones. I thought Windows would down-mix the 5.1 channels to stereo, but it won't.
Funny thing is, I could watch youtube videos, listen to Winamp MP3s, even play some games and never noticed a problem.
My guess is these programs downmix 5.1 to stereo themselves.
I played my Skeletor in Space game and nihakue's example .capx and sound worked on all browsers tested: Iron, Chrome, Firefox, IE9.
NOTE that another problem was indeed the MIME types on my server as pointed out by ramones; only the game hosted on Dropbox works properly.
A couple of important observations though:
- Firefox performance took a serious hit on Skeletor in Space, I get a lot of slowdowns/speedups now that audio works.
- In IE9, game was silent for a few seconds but then audio played properly. I guess this is caused by preloading a lot of audio, as stated on the Construct 2 manual.
Now that I finally solved a mystery, can I get a discount on a license pls?
<img src="smileys/smiley2.gif" border="0" align="middle" /> <img src="smileys/smiley2.gif" border="0" align="middle" /> <img src="smileys/smiley17.gif" border="0" align="middle" /> <img src="smileys/smiley4.gif" border="0" align="middle" /> <img src="smileys/smiley4.gif" border="0" align="middle" />