Suggestions for getting surround sound from a PC's SPDIF output?

I have just assembled a new PC, and the motherboard allegedly supports 7.1 surround. It has SPDIF outputs, as well as the usual bank of analog outputs. I want to use the SPDIF to connect to the receiver in my HT. It is an older receiver (Sony STR-K740P), which doesn't support multichannel inputs, but does have SPDIF inputs for Dolby surround sound.

By searching the forums here, I've learned that Dolby encoding is required, for my receiver to properly receive and decode 5.1 sound. The motherboard doesn't do any encoding, so the SPDIF is really just a fancy way to do stereo sound.

What I'd like is for my PC to do what my Xbox 360 is doing; the SPDIF just makes surround sound happen, presumably because the 360 has some encoding hardware in there. I assume I need a sound card for this. (there isn't a software solution, is there?)

Here's the rub: my receiver has one optical and one coaxial input. The 360 is using the optical input already, so I need my PC to use the coaxial input.

So, here are my questions:

Is there a sound card that suits my needs? (Coaxial SPDIF, Dolby encoder built in)
Is there a program that'll solve my problem? (Some sort of utility that encodes surround sound on the fly?)
Or, is the best solution to buy a receiver with multi-channel inputs?

The PC is a gaming machine. I'm not planning to watch movies with it, though I may use the media center to watch TV shows.

Any advice is appreciated, thank you.

I still welcome any advice, but maybe I should've hit Google before making this thread.

I see now that what I'm looking for is called Dolby Digital Live, which encodes on the fly, and it looks like the X-Mystique is one example of a sound card that has what I'm looking for.

My existing setup is the motherboard hooked to my receiver via SPDIF. With that, I just get stereo sound. I haven't purchased a Dolby Digital Live solution yet, I'm shopping around for one right now.

I finally found this thread, which has all of the DDL discussion I could hope for:
http://www.avsforum.com/avs-vb/showthread.php?t=605522

What I want to do is to play games with surround sound through my HT receiver, which only does surround via Dolby Digital or DTS, through a single cable. You may have a motherboard with onboard Dolby Digital encoding, so you have something that works already. There are a few available, but mine isn't one.

Most motherboards and sound cards only support surround sound through analog PCM outputs, i.e. you have three or four outputs, each of which carries two channels of sound.

I just learned that Creative makes a standalone device called the DTS-610 Home Theater Connect, which takes a multichannel input and encodes it into a single SPDIF output.

Other solutions include the X-Mystique or X-Plosion sound cards, which offer DTS pass thru, encode WMA 5.1 to Dolby, encode standard Direct X surround to Dolby, and offer EAX 2.0. My motherboard can't do anything except the passthru. Its SPDIF outputs are little more than window dressing.

I ended up getting an Auzentech Xplosion, which solved my problem nicely. DTS surround via coaxial SPDIF and everything's happy now.