Direct digital conversion of DTS/DD SPDIF to PCM Stereo

Well this is my first actual post in this forum, although I have lurked around here and gained much valuable insight so here we go.
There was an actual thread on a very very similar request to this a few months ago but it did not appear to gain a solution before degenerating into arguments, and I am unsure as to the necromancy regulations on this forum, so I thought I would play it safe and make a new thread.

I have a requirement for a piece of kit to take in a DTS/DD encoded signal over S/PDIF coaxial and convert it to a stereo PCM signal which could be output over another S/PDIF coaxial line, hopefully with the minimal possible latency. The equipment should simply pass through stereo if it is fed a PCM source. (I cannot guarantee or control the input format at any particular time).

The reason for this is I am the custodian of a hybrid digital/audio distribution system based upon Scrap-metal priced Crosspoint matrix switches from ebay, and because I hate those damn screw terminal connectors I am proceeding to use a second switch meant for S-Video to switch audio using the S/PDIF standard.

The idea is that one channel will hold a signal that will be guaranteed to be stereo PCM under all circumstances (this would be on the 'Y' channel) and the other would hold a signal that could be true surround if the source wishes to output it. Purely stereo outputs through HiFi amps would use the Y signal and cheaper stereo only DACs - whilst the surround amp would use the C signal.
So I need a way to make my surround sound sources output surround and stereo simultaneous - which is problematic in the least.
Or I need a converter, hence this thread.

Unfortunately I have been unable to find a pure digital solution and I am a bit worried that converting to stereo analogue (for example using a Teufel Decoder Station) and back again (using an ADC) is going to seriously degrade audio quality.

Anyone got any solutions?