This NASA webpage says that the EDL mic wasn't able to record sound during the descent, but has been able to record sound from the surface of Mars. So the mic is functional. But why couldn't it record sound during the descent? The webpage mentions the turbulence of the entry and descent, but is rather vague on the subject.
There's an interview with the audio engineer for the mission, Jason Achilles Mezilis, on the Naked Scientists Podcast. The system was supposed to record five and a half minutes of audio during the descent. He has a brief mention of the problem around 43:00 on the podcast. He didn't go into great detail.
By the end of the first day it was relatively known that ... that the audio was lost. It was basically a problem between the digitizer and the software. Things not talking to each other.
Technology Review has an article with a similar quote from "NASA Officials"...
The [EDL] microphone unfortunately failed to collect data properly. It does not seem to be a hardware issue, and NASA officials speculate there was a communication error between the system that converts sound from analog to digital and the onboard computer.