My volume is greyed out with a (/) on it I am running Mac OS X 10.6.8.

The output of sudo killall coreaudiod and sudo osascript -e "set Volume 5":

Last login: Fri Nov 25 09:13:21 on ttys000
Daniel-Jensens-MacBook:~ danieljensen$ sudo killall coreaudiod
Daniel-Jensens-MacBook:~ danieljensen$ sudo osascript -e "set Volume 5"
2016-11-25 09:14:30.662 osascript[173:e07] Error loading /Library/ScriptingAdditions/Adobe Unit Types.osax/Contents/MacOS/Adobe Unit Types:  dlopen(/Library/ScriptingAdditions/Adobe Unit Types.osax/Contents/MacOS/Adobe Unit Types, 262): no suitable image found.  Did find:
    /Library/ScriptingAdditions/Adobe Unit Types.osax/Contents/MacOS/Adobe Unit Types: no matching architecture in universal wrapper
osascript: OpenScripting.framework - scripting addition "/Library/ScriptingAdditions/Adobe Unit Types.osax" declares no loadable handlers.
‘Optical digital-out port’ shown in System Preferences indicates that the computer believes something is plugged in to the audio out on your computer. Try plugging in headphones then disconnecting them, or otherwise clean the port.