I need to be able to capture sound from an application and send it over to another application. It looks like Apple keeps tweaking the sound libraries and finally under 10.9 both Soundflower and Jack stopped working. I started looking for sample code and it feels like Apple is deprecating making kext-based audio drivers — the corresponding sample code is gone from the developer.apple.com site.
However! There is a new code sample AudioDriverExample that worked for me. Check out the SimpleAudio part of the project. It provides a driver that reads data into one buffer and writes data out from another buffer. Replace the input buffer pointer with the output buffer pointer and you get yourself a decent virtual audio driver similar to Soundflower.
You may have to fix a bug in SA_Device.cpp in
ThrowIf(theNewFormat->mFormatFlags != (kAudioFormatFlagIsFloat | kAudioFormatFlagsNativeEndian | kAudioFormatFlagIsPacked), CAException(kAudioDeviceUnsupportedFormatError), "SA_Device::Stream_SetPropertyData: unsupported format flags for kAudioStreamPropertyPhysicalFormat");