I have a receiver (Yamaha HTR-5990) that has HDMI and 7.1 channels, but it doesn't decode the DTS-HD or TrueHD formats, it only does the Dolby EX and Prologic IIx formats. Based on what you said above (and if my receiver processes PCM), I can set my blue ray player to send out PCM to my receiver via HDMI and I will have DTS-HD and Dolby TrueHD sound coming out of my 7.1 channels in loss-less format? I always thought I needed to upgrade my receiver with one that accepts the new BluRay HD audio formats.
What are the downsides to this method? Do you lose bass management, or any calibration settings? Does this limit the choosing of specific audio decoding? For example, if the BluRay has a 5.1 sound track it will only come out 5.1 channels and if it has a 7.1 audio track, it will come only out 7.1? Since I am only sending it PCM, my receiver won't touch the audio and force it out of more channels?