We would like to inform you that Intel considers this a mature product therefore the support we offer is only through our web site where you can find product information, troubleshooting, BIOS updates (latest and old ones) and drivers:
As an additional detail, please test a different device connected directly on the optical output without the receiver in order to ensure the connector is working fine.
I looked through that site and I wasn't able to find anything useful.
I am pretty sure this is an issue with the driver itself (or IDT audio control panel). I uninstalled the driver, and the control panel and used the built in WHQL drivers offered in win7. Everything is working as expected. S/PDIF shows up as a playback device as expected, and I can play video over HDMI and audio over the optical out like I want.
I would prefer to use the latest driver, but this scenario doesnt work when I do.