Like afrogt says, you're not going to find any AV receiver that will give you any sort of volume control over the optical outputs. Moreover you're not going to find any AV receiver that will convert HDMI or analogue audio input to optical audio output. Your probably going to have to completely reconsider what you were trying to accomplish.
In the end I will be getting 5.1dd sent to the DSS2 and I will be able to control the volume with my AVR remote.
There's two problems with this. First since most TVs don't support 5.1 Dolby Digital over HDMI you may only get 2.0 PCM. The second is that the HDMI audio output of a recevier isn't volume controlled either. A receiver's volume control only affects the speaker outputs and any pre-outs the receiver might have.
The simplest solution would seem to be a longer optical cable so you can move the DSS2 closer to you.
Another possible solution is that many AV receivers support Dolby Headphone and other virtual surround sound headphone technologies that would make using the DSS2 unnecessary. You could plug your headphones directly into the receiver and get virtual surround and control the volume and everything else from the receiver's remote control.