Well, I got it fixed. After making sure all video processing was off, and trying every combination of HDMI output I could I ended up resetting back to factory defaults. It worked, but I don't get why. When pushing display to see what was going on input/output wise it would always say 1080p 60 in/1080p 60 out for the sub out, but when putting back on main (before the reset) I'd get 1080p 60 in/----- out. It's almost like the main HDMI out was turned off...which it wasn't.
Very strange, but I'm glad it's working. This still has me not wanting to purchase Onkyo again. I guess when you stuff as many features as you can into a receiver QC isn't as high a priority as it once was.
Sorry for the "false" alarm.