I would assume ripped MKVs with discreet FLAC would be able to be output (MadFLAC) to this device and sent to the receiver as PCM losslessly, correct? As would any other decoded 5.1/7.1 source, in the same manner you would output to analog? (IE: Apple.com 1080p trailers with 5.1 AAC, decoded to PCM and sent to the reciever as such via HDMI)
Also, if bitstreaming is a reality, how hard would it be for someone to write a DirectShow filter that bitstreams TrueHD/DD+, and DTS-HD/MA via HDMI? Seems like it would be easier than FFDShow's EAC3 decoder, so that could be a possibility?
At that point we'd only need AnyDVD HD, MPC, and appropriate filters for a lossless disc-playback alternative to PowerDVD & Arcsoft TMT (albeit no menu support).