Axeman, I feel all your problems as well. The only difference is I am trying to get my 4350 to work with windows 7. I can get 5.1 pcm, but I can't get the dts or ac3 pass through to work. I really want to get my htpc to work with this soon.
When I was using the 4550 with Win7 RC, I really needed to mess with ffdshow's settings to get that going. Once that is done the passthrough works. I don't have 5.1 LPCM material so I can't really test that, but the receiver defaults to 5.1 LPCM mode anyways and when I'm playing AC3 materials the DD sign lights up.
Still need to figure how to upmix all stereo stuff to 5.1 automagically
though, but I'm happy with those H.264+AC3-in-MKV stuff.
The Model M is not for the faint of heart. You either like them or hate them.
Gerbils unite! Fold for UnitedGerbilNation, team 2630.