Neurons at higher stages of sensory processing can partially compensate for a sudden drop in input from the periphery through a homeostatic plasticity process that increases the gain on weak afferent inputs. Even after a profound unilateral auditory neuropathy where > 95% of synapses between auditory nerve fibers and inner hair cells have been eliminated with ouabain, central gain can restore the cortical processing and perceptual detection of basic sounds delivered to the denervated ear. In this model of profound auditory neuropathy, cortical processing and perception recover despite the absence of an auditory brainstem response (ABR) or brainstem acoustic reflexes, and only a partial recovery of sound processing at the level of the inferior colliculus (IC), an auditory midbrain nucleus. In this study, we induced a profound cochlear neuropathy with ouabain and asked whether central gain enabled a compensatory plasticity in the auditory thalamus comparable to the full recovery of function previously observed in the auditory cortex (ACtx), the partial recovery observed in the IC, or something different entirely. Unilateral ouabain treatment in adult mice effectively eliminated the ABR, yet robust sound-evoked activity persisted in a minority of units recorded from the contralateral medial geniculate body (MGB) of awake mice. Sound-driven MGB units could decode moderate and high-intensity sounds with accuracies comparable to sham-treated control mice, but low-intensity classification was near chance. Pure tone receptive fields and synchronization to broadband pulse trains also persisted, albeit with significantly reduced quality and precision, respectively. MGB decoding of temporally modulated pulse trains and speech tokens were both greatly impaired in ouabain-treated mice. Taken together, the absence of an ABR belied a persistent auditory processing at the level of the MGB that was likely enabled through increased central gain. Compensatory plasticity at the level of the auditory thalamus was less robust overall than previous observations in auditory cortex or midbrain. Hierarchical differences in compensatory plasticity following sensorineural hearing loss may reflect differences in GABA circuit organization within the MGB, as compared to the ACtx or IC.