Hearing loss due to peripheral damage is associated with cochlear hair cell damage or loss and some retrograde degeneration of auditory nerve fibers. Surviving auditory nerve fibers in the impaired region exhibit elevated and broadened frequency tuning, and the cochleotopic representation of broadband stimuli such as speech is distorted. In impaired cortical regions, increased tuning to frequencies near the edge of the hearing loss coupled with increased spontaneous and synchronous firing is observed. Tinnitus, an auditory percept in the absence of sensory input, may arise under these circumstances as a result of plastic reorganization in the auditory cortex. We present a spiking neuron model of auditory cortex that captures several key features of cortical organization. A key assumption in the model is that in response to reduced afferent excitatory input in the damaged region, a compensatory change in the connection strengths of lateral excitatory and inhibitory connections occurs. These changes allow the model to capture some of the cortical correlates of sensorineural hearing loss, including changes in spontaneous firing and synchrony; these phenomena may explain central tinnitus. This model may also be useful for evaluating procedures designed to segregate synchronous activity underlying tinnitus and for evaluating adaptive hearing devices that compensate for selective hearing loss.