I have suddenly run into this problem as well, but just when hitting PLAY on an audio file I’ve imported.
Have you found anything that has worked? Nothing is fixing the problem for me.
Check in the Windows Sound Control Panel and ensure that the device you are trying to use is enabled and working. Also check that it is configured to use the same sample rate as you are using in Audacity.
Note that mono devices (such as USB microphones) should be set to record 1 channel (mono). Stereo devices should be set for 2 channels (stereo).