Major issues with my NEW iMac M3 - no audio, no mic, no camera, can't run most apps

I pre-ordered the new iMac when it was first announced (16 GB of memory & 1 TB of storage). I use this computer at work and I'm the only one at the office using a Mac. At first, it worked beautifully with no issues whatsoever. Then about a week and half ago I started experiencing all these issues (I keep discovering new ones every day):

1. No sound - it's literally stuck on mute

a. Volume buttons on keyboard no longer work

b. Went to System Settings > Sound, and nothing happened… literally... the Sound panel never even opened....I restarted several times and kept trying and waiting for it load and when it finally opened everything was grayed out and no devices appear on list. I can't click on the volume slider, or check/uncheck mute box.

c. Went to System Information > Audio and nothing loaded

d. Sound icon in Menu bar shows it's muted but when I click on it nothing happens/opens and the slider is grayed out.

e. I tried to open Audio MIDI and the app was unresponsive and never opened. Had to force quit.

f. I tried to open Music app and the app was unresponsive. Restarted the computer, tried again, waited and waited. When it finally opened, I wasn’t able to play any songs.

g. I tried opening a video with QuickTime Player but the app was unresponsive. Had to force quit, try again, still wouldn’t open. Restart computer, try again, same thing over and over again.

h. I tried playing different random videos on YouTube and nothing loaded.

2. No Camera

a. Tried opening FaceTime and it was unresponsive. Force quit, restart computer, tried again, still unresponsive. I let it be for several minutes and then I finally got an error message “No Video”

b. Went to System Information > Camera and nothing loaded.

c. Tried opening Zoom and the app was unresponsive. Had to force quit.

d. Tried doing a call on Microsoft Teams and it froze so I had to force quit.

3. No Mic - Tried using Siri (read an article this can help resolve audio issues) and keep getting an error message “Siri Not Available Connect a Microphone”

4. Mail opens and new emails come in, I even get notification banners on top right. I can read the subject line and first line of the email in the preview panel but when I click on an email to open it up the page is blank… no header, sender, subject or any text at all…. Just a white box. I can’t even compose a new email. I deleted the accounts, and reconnected, redownloaded all the emails, still nothing.

5. Chrome & Safari keep freezing

6. Can't open most apps like iMovie, Apple TV, Garage Band. They just "bounce" on the dock until I force quit. The only apps that work are Microsoft Word and Preview so long as the documents do not have a lot of data.

This is the best part…despite all of these issues, I ran Apple Diagnostics and no issues were found!!!

I had our IT team troubleshoot (we even updated to Sonoma 14.2.1) and they think it’s a hardware issue. In other words, my new M3 iMac is a lemon. How is this even possible?!