Coops, this is most likely a configuration problem and the best way to make sure it is configured properly is to do one thing at a time, which is what Duffinator was suggesting. Based on your answers to his questions, I have a few thoughts about what you need to check. First disconnect everything but the dvd player and put in a disc that you know has a DD 5.1 track.
coops said:
Question 1
5-disc sony DVD player model # DVP NC600
Heres how its hooked up;
Optical out to optical in #1 on HK
Right Left Audio out to DVD R/L Audio in on HK
S- Vidio out to DVD S-Video in on HK
Nothing wrong there with the physical connections. The fact that you say you only get analog though is a very big clue. To get digital audio from the dvd player you need to do a few things:
1. You need to 'assign' the optical 1 input to the dvd selector on the receiver. This is done in the setup menu. Receivers come with default assignments and its possible that the optical 1 input is assigned to another input, like cd, by default. By assigning optical 1 to the dvd input, you are telling the receiver that when the dvd input is selected, get the digital audio from the optical 1 input.
2. On many receivers, you also need to tell it the preferred format - analog, digital, or auto. I think HK is like other receivers and by default it is set to 'auto' which means let the receiver detect the type of signal and choose accordingly. When on auto, and both analaog and digital signals are present, it will choose the digital signal. In order for this to work properly, the assignment (#1 above) must be correct.
3. In the dvd player setup menu, you need to set DD/DTS to 'bitstream', NOT PCM - this is what Duffinator was getting at when he said you need to tell the dvd player to output a digital signal. If it is set to PCM, the dvd player will do the decoding of DD/DTS to 2 channel analog instead of the receiver and because you have made the analog connections to the receiver too you will get 2 channel analog to the receiver (you can then get 5.1 using PLII or DTS:Neo surround modes).
So to recap: assign optical 1 to the dvd input, make sure the signal format is set to auto, and make sure the dvd player is set to bitstream. The receiver will automatically detect the DD signal and switch to the Dolby Digital decoder and you will have DD 5.1.
The cable box is the same deal - make the assignments on the receiver and make sure the cable box output is set to output digital audio. On the SciAtlanta 3100 remote, press menu twice and scroll down to audio:digital out. Set it to Dolby Digital not 'other'. The way that box works (I have a 3100HD) is that both analog and digital outs are active at the same time and because not all channels have digital audio, you need both the digital and analog connections to the receiver (as you do). When the receiver's assignments are set properly and the format is 'auto' it will automatically switch between analog and digital depending on what type of signal is being sent by the box.