I spoke with Ken Nguyen of DVDO today by phone.
This is the schematic of the system
that I'm currently planning.
I learned two things today. First AVS has a sale on the DVDO Quick6 for $324. I spoke with Mike Garrett to place this order.
Second, the DVDO Quick6 "AVR Mode via SPDIF" (which is the mode I'm planning to use) will send ARC audio simultaneously to both the SPDIF outputs (toslink and coaxial). Hence, no splitter needed.
"AVR Mode via HDMI" will send ARC audio to the DVDO Auxiliary HDMI out.
Comment from Ken: "Currently, this is not stable but we plan to address it in future firmware soon."
What Ken has not yet confirmed (he's looking into it) is whether a DVDO Quick 6 in "AVR Mode via HDMI" will simultaneously send out multichannel audio (ARC or not) to the SPDIF outputs (toslink and coaxial). In such a scenario, unless otherwise constrained by the Quick6, there could potentially be uncompressed digital audio going to the HDMI Auxiliary and compressed audio going to the SPDIF outputs. This seems unlikely to me.
Comment from Ken: Without ARC (audio is from source devices), Quick6 will output the same audio format via HDMI Aux and S/PDIF simultaneously. What audio format depends on what AVR mode was selected in Quick6. If you select AVR via HDMI Aux mode then the audio EDID from the connected device on HDMI Aux is used. If you select AVR via S/PDIF mode then a predetermined audio EDID is used. And this audio EDID is limited up to Dolby Digital and dts.
With ARC, Quick6 can only output via S/PDIF. As mentioned above, audio from HDMI Aux (with ARC) is unstable.
Also, I found what appears to be a decent Digital DTS/DD/PCM to Analog Audio adapter from FiiO called the D07. This is superior to the older Gefen DAC in that it also converts DTS.
Ken also noted that a firmware update 1.02 for the Quick6 is expected next week or so.