CD Audio has nothing to do with WinUAE sound settings. CD Audio is completely handled by CD drive (hardware or virtual).
Most common problem is wrong SCSI mode, it must be set to SPTI in misc panel. (other modes require audio cable between CD drive and motherboard, virtual CDs usually does not support this anymore)
Attach both winuaelog.txt (remember logging checkbox in misc panel) and winuaebootlog.txt if it still isn't working.
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