any suggestions other than upgrading my operating system on mac?
Well of course upgrading is a good idea.
Other solution: with "hardware acceleration" enabled, MM will use AVFoundation if possible. AvFoundation is handling the audio himself, so it's like if the movie was played in QuickTime player. However you have to use H264, MJPEG, Apple Pro-Res and a few other codecs. I don't know about codec supported by AVFoundation on 10.7... but H264 is for sure supported.