I have just looked into this again. It seems some chip sets can decode multichannel loss less codecs over HDMI using LPCM. The receiver needs to be HDMI version 1.3 and state that it can handle multichannel over LPCM. Most older receivers to not have the correct chip set to do this. So it seems this has got to be a confusing area.
But if it is HDMI 1.3 and says it can do 7.1 over HDMI it should be decode it properly.
Doc, all versions of HDMI (assuming it's not just video pass thru only), can handle 8 channels of mch PCM, at 192khz. This even includes HDMI 1.0.
My preliminary off the cuff recommendations to anyone new to this stuff:
1. Make sure you chose the right codec on the disc itself!
2. My personal recommendation is to defeat any DRC inside the player.
3. Some receivers cannot matrix the rear speakers from a 5.1 PCM source. However, some receivers have available FW that finally allows them to do so. If not, then you only get 7.1 when the disc is natively 7.1.
avliner, your Pana bdp is capable of decoding all of the relevant formats, so go into menu to make sure TrueHD+DTSMA are set to output as mch PCM. Make sure that PCM downmix to 2.0 remains defeated. Good luck.
If you feel that it doesn't sound as good, well, it's possible that the volume is simply different. They often say louder sounds better. I've once compared a lossy vs lossless track on a certain movie, and the lossy bitstream was louder.
