I actually made a mistake in the first post. The manual does clearly state it won't decode digital signals. I find this suprising since it obviously decodes at least the front two channels into an analog output for the internal amplifier.
I was even thinking I might have to buy a new receiver, but you make it sound like all receivers won't do this, or at least they will be hard to find.
I suppose I've settled on having to run two more coax lines for analog. It's getting to be quite a bundle coming out of the wall.
BTW, the Yamaha does have the Fixed Output for Zone 2/3. I wish it had the same for the Pre-Outs. Oh well