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Join Date: Jan 2001
Location: upstate NY
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Unfortunately, no, the 8801 doesn't have direct support for sending digital signals to its Zone 2 analog outputs. As you've found, all-channel-stereo is the only way to do it. Otherwise, you need to provide analog connections from the devices that you want forwarded to Zone 2.
Sending two-channel PCM to Zone 2 was introduced by D&M in the current model year (2013), so it's in the SR 7008 receiver. One can hope that downmixing of multichannel digital audio to stereo in Zone 2 might be available in the upcoming model year (2014), but an 8801 replacement isn't expected until October.
Unfortunately, audiophile terms like "bite" don't help to determine what's lacking in your audio. You need to use a spectrum analyzer like OmniMic or REW to find out exactly what's not right. Then you can address it.
Marantz SR7009 avr + MM9000 amp --> Atmos 7.1.4
Fronts=NHT 2.9+AC2, FH+TM=DefTech PM1000, LCR+TM amped