Short link to this page: caseywatts.com/quicktime
Other gists & tricks: http://caseywatts.com/gists-and-tricks
Unrelated update: my book is out! Debugging Your Brain is an applied psychology / self-help book
Scenario: You want to talk with someone over google hangouts (like for a user study), and you want to record BOTH:
- the system output audio (from them)
- the microphone audio (from you)
(screenshots below in a comment)
brew cask install soundflower
(if you don't have/use brew, then google soundflower and install it from their site~)
This is for Quicktime to be able to record audio from both you and the other person.
- open the OSX system app Audio Midi Setup
- Create Aggregate Device
- Include both inputs:
- Built-in Microphone
- Soundflower (2ch)
 
- Name this one Dual Input for Quicktime(optional)
This is so both you and quicktime (via the aggregate device^) can hear what's going on.
- open the OSX system app Audio Midi Setup
- Create Multi-Output Device
- Include all both outputs:
- Built-in Output
- Soundflower (2ch)
 
- Name this one Dual Output(optional)
- alt-click on the volume icon in the taskbar
- choose your system
- input=- External Microphone(hangouts only needs one - quicktime will get both on its own)
- Output=- Dual Output(hangouts should output to both quicktime and your headphones)
 
- Open Quicktime Player- (you may need to close and re-open this after configuring inputs)
 
- File->- New Screen Recording
- In the dropdown next to the record button
- Microphone = Dual Input for Quicktime
 
- Microphone = 
@lucasm-iRonin I haven't tried it on anything but my machine - I'm on El Capitan.
You've probably done this already but: maybe make sure everything involved is up to date, and maybe restart the computer? Soundflower is the part I'd suspect would have issues more than the other parts - maybe try to confirm that that part is working in isolation somehow?