Ok, so here's some more information.
I just bought some new Paradigm Atom Monitor 7's to replace my front soundstage of a Pinnacle Audio 5.1 setup. My intention was to have a nice hybrid 2.0/4.1 setup to use for movie watching (5.1) and vinyls/cd (2.0).
Once I had the speakers installed, I re-ran Audyssey to learn their new parameters, placement, etc., for proper configuration. Once everything was up-to-snuff, I put in my blu-ray of Dave Matthews and Tim Reynolds acoustic concert. I initially selected the PCM Stereo (48khz/24) but it sounded AWFUL. The new speakers were picking up waaaay too much bass, and the sub wasn't even firing. So I messed around with my Denon's settings, and found that the speakers were set to a 40khz crossover, which I switched up to 80khz. However, in going back to the PCM Stereo mode, it STILL sounds just as bad!?!?
I have NO idea where my settings are messed up. When I select the Dolby Digital 5.1 (640kbps) or the Dolby TrueHD (96khz/24 bit) the audio sounds just fine. Im running blu-rays and CD's through my PS3, so I suppose that could be effecting things as well.
Any insight would be GREATLY appreciated.