Okay, I upgraded to HDMI 2.0 bi-directional cables, an HDMI 2.0 4K@60Hz capable AV receiver, running ARC successfully, and have AQUOS link enabled with the AV Receiver to fully use the ARC HDMI channel. It's functioning perfectly now as it's only either the sharp TV audio only or the home theater audio only, but AQUOS Link (under the advanced settings) is intelligent enough to use the TV speakers when I turn off the receiver. ARC is a very cool surprise, and I'm quite impressed.
All of the Sharp tech reps I spoke with all have told me the same thing, digital optical audio out will not work with HDMI unless the source is utilizing the TV tuner via direct cable or Digital Antenna, and I competely understand, but I was a bit confused why it was working with my precious LC-70LE650U.
Overall, I'm very satisfied with the LC-70UD27U. I ran a network firmware update right after I set it up. The out of box factory calibration is very good (human skin may look like pastel at times), but it still needs to be calibrated, the colors are vibrant and the viewing angle is good. I would rate screen uniformity an 8/10 only when it's completely black, but for the price tag of $3K this TV is a great deal, so much that my father-in-law is getting one for himself. It also has a built-in "chromecast" casting feature that u can cast from ur devices using any app that is chromecast capable (I can spare and move my chromecast to another TV now). The bezel design is thin and quite nice (nicer in person). The audio is quite loud from the TV (mostly sharp highs and minimal bass). Mounting it was a breeze, and the kids and wife love it. The motion is smooth, I will keep u updated on my experience!