FMRadio is evil... uninstall it, reboot, and all works well. (I had a similar problem in chinook; fmradio was developed when there were two audio outputs, speakers and headset, and just doesn't work right now that there's BT handling in the mix. It gets confused and winds up playing nowhere.)

Mediabox can play FM, and there was another one or two as well. Use one of them instead (and completely uninstall fmradio), and I bet it works. I haven't tried the radio since I went Diablo, though, as I really don't use it, so YMMV.