The sound came only from the headphone jack, so I replaced the jack connector with a known good one after carefully desoldering the 8 pins, but the symptom persists.
I only got the sound at the first boot after the connector replacement, then the Mac has no sound again. The headphones work.
Ideas?
Loose speaker cable? If you have a larger iBook that has a plastic edge on the left side of the keyboard, and on the same plane as the keyboard, try pressing down on it about 2-4 inches below the round speaker grille. What you're trying to do is apply some pressure to the molex connector for the speakers.
I've had this problem on more than one iBook, and this is a good check for it.
I took it completely apart and replaced the palmrest/topcase. The mac either with OS 9 and OS X shows only the headphone option from the Sound panel.