I thought I'd post my experience on here, since I searched and couldn't find anything related.
Just got 4.4 KitKat on my Nexus 7 (2012), and after updating, the auto-rotate wouldn't work, and the gyroscope seemed to be broken. On games that used the tilt to turn, it wouldn't register that I was tilting the device. Tried a soft reboot (Settings -> Factory Data Reset) and after that, it was still unresponsive. Did a hard re-boot (Factory Reset) (hold power, down volume to Recovery Mode) and when it started back up, that resolved the issue.
Now it's working again, and I'm in the process of re-downloading all my apps. Kind of a PITA, but it works