The solution is called
WMV3Server and is a nifty piece of Japanese programming. I first found out about it from
this thread.
What it does is it seems to emulate a streaming server, as you first enter the AVI file and after it has processed it you open the localhost.asx file and it plays in Mac WMP with sound.
I had never gotten the -dumpstream option in mplayer to work, so for me this is really neat. Searched, but didn't see any earlier mention of it.
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