Home audio & video: Having audio issues with PS3 playing Blu Ray thru toslink

Having audio issues with PS3 playing Blu Ray thru toslink

I have a PS3 with firmware 1.51, 60GB. I have the HDMI connected to a projector which has no sound capabilities. So I have connected a TOSlink cable from the PS3 to my Denon receiver AVR-3802. I have absolutely no problems with standard DVDs playing the soundtrack, whether it is Dolby Digital 5.1 or DTS 5.1.

When watching BluRay discs, the audio soundtrack will play perfectly fine thru the analog cables from the PS3 and through the TOSlink cable in PCM mode but I am limited to stereo output only.

When switching to bitstream mode and enabling 640kbps DD5.1 or DTS5.1 I will get true surround sound mode. But the soundtrack intermittently cuts out and is replaced by a loud static noise (like a "PSSSHHHHHT") or a shrieking whistling noise. The noise lasts from a split second but can last as long as several seconds and then the soundtrack reappears as if nothing happens. The noise is quite loud, louder than the soundtrack, loud enough where it blew a tweeter in my front speakers (a real bummer)

I have browsed some forums and this seems to have happened to some users but they were unable to resolve the issue. Some users reported that the issue also occurs in the audio from the HDMI connection as well.

Again, to clarify, this only happens with BluRay, not standard DVDs. I also noted that I do not have this problem with "Ice Age 2" but the issue is REALLY bad with "Superman Returns". The discs are definitely not smudged or dirty as I checked them all before inserting into the PS3. I also noted that "Ice Age 2" has a bit rate of 448kbps and "Superman Returns" has a bit rate of 640kbps. The noise does not happen in exactly the same spot of the soundtrack of Superman but usually in the same area.

Someone mentioned that older receivers may not handle the 640mbps signal, since DVDs were speced to a max of 192-448kbps audio signal(depending on format). Is this true?