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In the meantime, I've found what others have already posted in another thread (http://forum.cyberlink.com/forum/posts/list/27179.page) to be true - downgrading to v2608 allows playback to work once again.

So until PowerDVD 11 is updated, uninstalling and updating to 2608 is your best bet.
I'm suffering exactly the same problem with PowerDVD 11, and have raised a support ticket to inquire when a fix will be made available for PowerDVD 11 users, since from the following link below it looks like there is already an update for PowerDVD 12 users:

http://www.cyberlink.com/support/product-faq-content.do?id=15666&prodId=1&prodVerId=-1
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