I had gone through that troubleshooting prior to posting. After your reply I went through it again. One item that I skipped was the ATI solution link.
"If the HTPC is having issues reconnecting after coming out of "sleep" mode, then refer to this ATI solution or this NVIDIA solution for more info to resolve the issue."
1) because my issue wasnt a sleep mode issue and 2) I have a NVIDIA and not an ATI card.
The HdmiOn.exe program though under ATI solution:
resends the EDID data which brought the Audio back. I think for me this is about as good of a fix I will see.
Just wanted to pass on what worked for me in case others have HTPC audio issues. Still think there is something Deno isnt doing right as I dont have this issue when connected direct to the TV, but I can live with it Thanks!