Is there an input selector where you can choose which connection you want? Not the default, but to choose digital, analog, multi-channel or auto input select. On some AVR's, like Denon, you can select multi-channel analog with any source selected. If you are trying to use digital, even with it assigned properly, if the receiver is set to play from the analog input, it will not play. In this case, it may very well display the symptoms you describe. See if you can choose digital input through PCM manually.