I have completely removed the ATI drivers and that fixed the problem for me. So I'm running whatever stock drivers come with Windows 7.
I was having to unplug the cable from my computer (HDMI cable) and plug it back in for the sound to work. Not a viable solution for me, as the computer is in another room from the my sound system.
Damn it, ATI.
Anyone found a forum where ATI engineers actually respond to issues?
Oh, and this is such a big deal to me, that I"m considering NVIDEA for my next rig. It seems they have taken the performance crown from ATI this latest round, also. Bonus.
With Intel beating them at CPUs, ATI is really looking bad right now. My current Phenom II/ Radeon rig feels like a charity case.