I created a JS fiddle for this here:
http://jsfiddle.net/lindseymysse/6C65Y/1/
The error:
Starting Yesterday evening, a few videos on the site I\'m
YouTube indeed has changed their API over the last couple of days and flash fallback from their HTML5 Video Player fails. Other users report a black or blank YouTube Player Screen and a video duration of 0:00 which are other symptoms of this bug once the SWF player is presented.
I updated your jsfiddle.net with a workaround to only use the flash player from the initial start, which then prevents fallback from flash issue until it's resolved.
It retains your /embed/ scheme so any custom API that's used will still be valid.
The workaround adds the playlist param with no other video values and a comma, normally used to separate videos in the playlist, so that a playlist of 1 is realized.
Of course if your were already using a playlist, then you would not be subject to this bug since the playlist is the only flash exclusive item that forces the flash player to be rendered correctly in the /embed/ URL at the present time.
Here's the update:
http://jsfiddle.net/6C65Y/3/
Status Report: This YouTube API bug is not an issue any longer.