Mic Not Picking Up Voice But Instead Transmitting System Sound

So today my mic suddenly stopped working. It no longer picks up my voice, but instead if I log on to Skype, Mumble or other voice communication services I constantly transmit any sound currently going through my PC, be that music, youtube videos, game sounds or anything else.I've checked that my mic is set to the correct default device and I've even tried uninstalling and reinstalling all sound related drivers.
 
The problem came out of the blue. It was fine yesterday and then today when I booted up and logged on to Skype to talk to a friend he couldn't hear anything until I started playing some music which he said he could hear as if he was playing it himself. So it's not just the mic picking up sounds from my headset (which wouldn't make sense anyway since it won't pickup my voice). I then tried to do a Skype test call with some music running in the background and as I expected the playback was the part of the song that had been running during the test call. So basically as stated my computer is suddenly transmitting sounds as if they are being given as input through the mic and no longer registers any outside sounds like my voice, or any background noise in the room etc through the mic.I also know it isn't the mic itself that is the problem as I tried hooking it up to my laptop and it worked perfectly fine there.