I think I faced exactly the same thing as you yesterday. I got an error message where it said something about the audio, sorry don't remember the error message. I tried a few things and gave up and just installed everything (Raspbian and Retropie) again. It should be another way though..... Its absurd you have to reinstall an OS because of this....
@mitu That's the funny thing. mpg123 IS part of BGM so uninstalling BGM uninstalls both (hence the loss of music completely) but uninstalling mgp123 by itself removed its config I suppose. I manually plugged the info back in and left BGM out this time around and finally got it working. Thank you for your reply.
