[badnaam]

I tried both 2.0 and 5.1. Same result, loud static.

Interestingly the receiver recognizes the signal as DD or DTS.

Can you try without the receiver (audio through HDMI to the TV) to rule out the receiver as the source of the problem?

Also can you try to use something outside of xbmc. For example can you play a Netflix movie or a TV show off of Amazon?

Any other DTS or DD feature played from another source (like XBMC from my laptop, with the same optical connection from laptop to receiver), plays just fine. Even movies that don't say DTS, DD and Blu Ray rip in xbmc, play just fine.

I did try connecting directly to the tv and that seems to be fine too.