I wish I had a solution for you with my reply, but unfortunatly at this time I don't.
It's so ironic, that I came across your post. I too have an identical problem to yours. My 1008 unit is almost the same age as yours (bought it in 2010). I tried everything one can imagine without any success. When I first noticed that amps weren't engaging on power up, I pretty much new It was all downhill form there. I also noticed that the Update Firmware selection in the set up options is not selectable anymore (grayed out). I too couldn't believe that this high end Onkyo unit would just fail like this after a couple of years. I must have spent 3 months researching and comparing between comparable units from Yamaha, Sony, Denon, Marantz, Pioneer, and many others and now feel pretty let down by Onkyo. I had Yamaha 900 AVR prior to this Onkyo, and I ran it hard for about 10 years w/o any issues, including it making through 3 different moves between states, apartments and my house.
I am not sure if I caused this problem by driving my Anthony Gallo Strada 5 system, which contains 5 x 6 ohm Impedance speakers and 300 Watt powered sub (which would not put load on integrated amps). I have a couple of other troubleshooting ideas I am going to try before completely dumping this unit.
1. Disconnect all wiring from the unit, and I mean ALL. Power it back up, go through processor reset, try to update firmware and connect just 2 speakers to see if I can drive them. If it still fails to drive, I will take it appart to see if amp coils show discoloration. Which would indicate hard failure.
2. I will also check out DAC. Reason being I suspect the DAC failure is that none of the sound modes, including 2ch modes are driving any speakers.
Although considering what I am learning about the Onkyo AVR's from 2010-2011 issue, a lot of the units had major problems. http://www.amazon.com/Onkyo-TX-NR1008-9-2-Channel-Network-Receiver/product-reviews/B003PGR130/ref=cm_cr_pr_hist_1?ie=UTF8&filterBy=addOneStar&showViewpoints=0
Stay tuned and good luck on your next purchase. I think I will be Yamaha bound again.