I don't have that particular rom, but my wife literally had the same issue on her nexus 4 yesterday. She had inadvertently activated "HDR". When HDR is on, the flash is disabled. If you have an 'HDR' icon when you pull up the camera app, try toggling it off.
Phone: HTC Glacier/MyTouch 4g
DD ROM: ICS Stepp_aospX 1.0.0-MR2 FINAL