Solved! Over the last few weeks I've looked all through the settings and manual for something that might help this, finally I found it.
First a little about my system:
1. No HDMI, all video is component video, I have four, three switched by the Receiver and fourth tied goes directly to TV.
2. Audio input is either optical or coax digital, except for the redundant analog audio from TV for analog channels.
The default setting for GUI Menu: Input select -> Audio Select was set to "Auto". Solution is to change to "Coax/Opt" for all channels (except TV).
My DVR was apparently dropping the digital audio feed during pause (or FF) and so the Yamaha had to hunt for an input in the auto mode. With the specific setting, the pops no long occur when resuming from pause or FF.
This fixes everything but the TV as a source. Since my TV only outputs optical digital audio for digital TV and analog L/R for analog channels, I have to maintain the Auto mode to be able to get sound from both types of channels. Perhaps after June this will become moot, if the analog really stops.
In rare situations on my DVD, I've not received digital audio out and in the past always also hooked up analog r/l in, but I'll wait til I see that again and if necessary, change the setting for the duration of the DVD.
It's been frustrating finding this problem, very sorry I had to go through replacing the unit before I finally figured it out. My e-mails and telephone conversations with Yamaha indicated I had a bad unit, so there was no help from them but to repair or replace. Sure glad I didn't send this off for the two week repair. I'll send another e-mail to Yamaha, hopefully they'll get this in their knowledge base.
Now I can finally enjoy this unit and fine tune the sound fields.
Thanks for all the replies on this thread, kept me focused on the problem.