Fortunately, it was a relatively easy fix. Will place the details here in case anyone else searches for it.
Mini dock plus series 3 for mobile workstations with 135 watt power adapter.
Thinkpad T420 4177-cto
When the laptop is in the dock and external speakers are connected to the jack on the dock using Ubuntu 11.10 64 bit, there is no audio output.
Using your favorite text editor, open the file '/etc/modprobe.d/alsa-base.conf' (sans quotes) - note this will require elevated access permissions (e.g., sudo / root) to change.
Add a line to the bottom that reads:
options snd-hda-intel model=thinkpad
Next, reboot the laptop and your sound should now be working...
To the original poster I guess this means you may very well have a software related problem, sorry I don't have a Windows fix for you...