I know that this is far less convenient than before, but it is a workaround.
You can do precise volume adjustment with AppleScript, controlled on a scale of 0 thru 100.
set volume output volume 0 --mute
set volume output volume 100 --100%
set volume output volume 27 --27%
You can get the current volume (also 0 thru 100):
set currentVolume to output volume of (get volume settings)
So, you can write a little script to increment the volume by 2% (approximately what one quarter square used to be):
set currentVolume to output volume of (get volume settings)
set volume output volume (currentVolume + 2)
You can make one for decrementing by changing that plus sign to a minus sign.
You can save this as a script or app, and bind it to a mouse or keyboard button (if your driver lets you), give it a keyboard shortcut (as a Service or with another app), or put it in your menu bar (with an app like FastScripts).