I would guess one of several possibilities
-- As an earlier poster said, MPGs (particularly for some DVD authoring apps) have to be in elemental streams, separate files for audio and video. If you put the MPG in a separate directory, call Windows Media player or Quicktime or sometihng and it plays audio and video, then the MPG isn't elemental, it's multiplexed and should play in Premiere.
-- We have weird problems with Premiere from time to time that I've never definitively been able to track down, such that it will randomly decide not to play audio. In most cases, if we shut down AND UNPLUG the power cord from the machine, and then reboot (after plugging back in, duh) the problem magically goes away.
-- Depending on the version of Premiere (I think 7+ does this), make sure that the conformed audio files aren't corrupt. Delete the "conformed audio files" folder in whatever subdirectory your edited file is, reboot, reload Premiere, and it will force it to remake the conformed audio files. This may solve your problem, it has for me several times.
Hope this helps.
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