See, there's the rub. I had tried PLIIx Movie and I was losing the back 2 channels. It was mixing it to 5.1 only and ignoring the BR and BL. I was able to get the 7.1 in two ways:
1) set the BD to send out PCM audio
2). ... cant remember the exact setting, but it is what brought the DTS-HD Master audio option as the selected default. The pressing the Movie button won't change the audio type. (this is on the DVD/BD port) I can get the exact name of the audio settings when I get to the house after work.
Originally I had left the player on the default settings for the audio which seemed to be sending the most widely accepted signals to the receiver. I rolled through all the avail options for Audio on the Receiver but none would spit out any thing to the rear channels.