afd auto, yes. I did the auto cal too, so don't worry about that. all 5 speakers are lit on the receiver and it scrolls pcm 48 (or 96) when the selection starts. it sounds like you are doing everything right, so it must be some tiny overlooked setting or something.
I don't know if this might help, but go in the 720 menu and double check in 5-audio that decode priority is set to dec. auto. also make sure in 3-sur that s.f. select is set to afd auto.
I'd be scratching my head at this point too. The fact that dolby 5.1 works for you rules out any speaker wiring issues, it has to be some setting somewhere. They didn't give you a 710 by accident did they?
I can't find anything about a factory reset in the manual, but page 56 gives instructions for resetting the sound fields to initial settings. Might be worth trying that, redoing connections while making sure afd is set correctly, and see if that helps?
oh, and i'd say go in the ps3 dash and redo the audio output settings. when it finishes, verify to me that hdmi is selected and there's a long list of output formats and linear pcm all the way up to 7.1 192kHz is shown.