The fact that it works intermittently may really be very telling, especially since you have a new driver and the problem still happens. It possibly is a signal that it IS on it's "last legs". They are not hard to replace if you are secure enough to "poke around" inside the computer. Basically you just unplug the old and plug in the new.
Here is a page showing how to do it, may not look exactly like your computer but it is pretty much the same process on most.
Replacing a Sound Card
Whoops! Is this a laptop?