You might get a better response in one of the other sections but I can take a stab at helping you. I notice with my 360 that on rare occasion the Dolby isn't recognized at startup. I have to manually go into the 360 menus and set the output to stereo, or whatever the non-dolby option is, then set it back to Dolby. Only happens rarely and hasn't happened in a while, but might be something to try. Other than that I guess the receiver should be somehow set to auto-detect the audio type.