The mute operator explicitly disables muting inside groups. I guess this is a safety measure necessary for the old groups, where every internal socket is exposed directly and access to muted nodes from external links could break. Waiting for confirmation by Joshua before attempting to fix.

Any updates Lukas? :)

Bastien Montagne (mont29) has been working on a patch for a more general muting mechnism (see link). I will try to make a final review asap so this can get into trunk. After that can try to fix this one.

http://projects.blender.org/tracker/?func=detail&atid=498&aid=27636&group_id=9

Patch was committed to svn now. Simply removing the check for groups in node_mute_exec seems to work here, but maybe there's a problem I'm unaware of?

Fix in svn, thanks for the report.