While working this evening I turned on music throughout the house. Sadly the living room didn't come alive with music. During the investigation I noticed that with nothing plugged in the Airport Express was still sending out an optical signal. After a bit of thought it occurred to me that the sensor that senses whether a min-jack or an optical jack are plugged in, was likely stuck. Sure enough a gentle probing with a small screwdriver and it was again working as advertised.