It works fine with the optical out on Linear PCM, as I had that setup going before with no problems. I have an Xbox360 on hand right now too, so what I had hoped to do was to be able to plug multiple things into the TV and use the one optical output there so as to get the surround working properly on everything. The HD cable box has the HDMI going to the TV and the sound then going from the optical to the receiver in a working manner, and the Xbox currently has the sound going into the TV via red/white RCA and out to the receiver via the optical as well.

What confuses the bejeezus out of me is why the setup works just fine with the signal travelling through the HDMI to the tv and out from there ONLY when a BD disc is playing, as that does give the impression that it should be working fine otherwise. Why would the sound be working through the setup fine with bluray but not with standard operation? Is there a known bug or anything regarding this?

Also - what would changing the BD/DVD Optical settings change based on the HDMI cable? I guess I'm hoping to be able to find a way to rectify this problem without simply having to abandon my previous plans and end up with more cabling than I should need otherwise.