OK so I have case #5(pasted below from sticky): i have followed the instructions and trouble-shot to death and need some expert help.
basically have older AVR Onkyo HT-R510(B) (i know the optical jack and cable both work by testing on my HD Tuner), but cannot get the ps3 to output digitally, infact, cant get any sound at all to come out (when directly outputting from optical). when I use HDMI setting it works fine and i can optical out from the TV to the receiver and even then it is fine, but is not digital.
I switched audio output for both HDMI and Optical to bitstream (and did it leaving HDMI sound alone too), and changed sound settings to optical and selected all 3 options, dolby, dts and AAV.
someone please help, it is extremely frustrating. I noticed most of these problems are back in 2007 so im hoping someone has the magic answer....
Case 5: PS3 connected to a recent vintage HDTV with HDMI and connected to an older AVR via optical digital audio cable (i.e., Toslink).
In this case you should use an HDMI cable to connect from the HDMI output on your PS3 directly an available HDMI input on your HDTV. Then use an optical digital cable (i.e., Toslink) to connected the PS3 digital audio output to an available optical digital input on your AVR. Your AVR will receive the digital audio data (with the PS3 set to provide bitstream output via it optical digital audio output) from the PS3 via the optical cable. The AVR will decode/process it then output the audio to the connected speakers. The HD video will be sent directly to your HDTV via the HDMI connection. Note that optical digital is limited to only carrying the basic Dolby Digital and DTS surround sound formats (essentially as provided with DVD players but in some cases with BD's you will get somewhat higher bit rates) and cannot carry the highest fidelity surround sound formats supported on some Blu-ray Discs. This is a limitation of having an AVR that does not support HDMI inputs, but in this case the PS3 can be configured to still be compatible with your existing equipment.
Suggested PS3 Audio and Video additional Settings for Case 5 (starting from XMB and Settings drop down menu):
XMB >>> Settings >>> Display Settings >>> Video Output Settings = HDMI >>> Setting Method=AUTOMATIC
XMB >>> Settings >>> BD/DVD Settings >>> BD/DVD Auto Output Format (Optical Digital)=BITSTREAM
XMB >>> Settings >>> Sound Settings >>> Audio Output Settings >>> Select the connector..= DIGITAL OUTPUT (OPTICAL)