I agreed with TLSGuy on many things but totally (almost) disagree with him on the processor vs AVR thing. AVPs could be just as complicated, and come with their own jam-packed nature, typically due to more I/Os such as multi channel analog inputs, balanced connections etc. The amp section of an AVR is actually simpler than some people think. It is true that now they tend to pack more than 7 channels of amps in one box, but they are simply a multiple of one same amplifier, though you do have to deal with more heat. Even on that count, an AVP (processor) can run very warm too. In fact, for most people in small to medium sized room sitting 8-11 ft, an AVR's amp section would consume less than 10 watts average, while the processor part by itself would consume much more, and actually generate more heat than the amp section at low to normal listening level such as around 75 dB average from 10 ft watching 7.1 action movies.
Back to your issue at hand, it seems to me you might have the HDMI settings messed up. To keep things simple, try not to engage ARC, just go back to the basic by say, assigning one HDMI at a time, and try it on a source such as a Blu-ray player, or TV box, Apple TV or whatever, that you know is in working order, and go from there.
It may help us to help troubleshoot if you post some screen shots of your HDMI settings and the input assign screens. You should be able to do it because you said the video part is fine, just no sound right?
It wouldn't hurt to repeat the factory reset one or two more time (some users reported that they had to do it several times to fix their issues), follow the instructions exactly as show below:
Turn off the power using
.
Press
while simultaneously pressing GAME and INFO.
Remove your fingers from the two buttons when “Initialized” appears on the display.