As an update, I might have gotten closer to figuring this out. There's always been an unknown device from when I first set this computer up. Tonight I happened to remember that fact & took a look at it. What do you know, the properties for this mystery hardware says it's a 'Internal High Definition Audio' But the minijacks have always worked without this particular hardware...
I've already tried reinstalling the audio. That might have caused a problem as on first boot after that my machine wouldn't boot. Kept saying there was a problem with the system32 config folder, that it was corrupted and couldn't be read. I booted into recovery mode and ran checkdisk, also tried the bootcfg /repair. After that it fixed itself, so maybe checkdisk is actually worth something?
Anyways, I'm going to download all the motherboard drivers and see if any of those play nice with this mystery hardware. In the properties details it says the driver failed to install, that currently the hardware is in D3 power mode. But I'm only guessing that this is the spdif output. There's nothing I can see that identifies what exactly this is.
So as an edit to this reply, I gotta give up for the night. I managed to get a blue screen of death, something I don't recall seeing in a long while! Uninstalled/reinstalled ver 6526 and 6602 of the audio drivers. No improvement, but one thing that's different is the mystery device is now naming itself as a second 'Audio Device on the High Definition Audio Bus'. I tried the chipset driver update with no luck.
So now I'm wondering if any of the other BIOS versions have better support for the SPDIF? Or maybe there's a better driver to load into windows? Or maybe I should just never have bought a bottom of the line motherboard!
Anyone know anything about the SPDIF on this board? It just started to work for no reason I can tell, but it's only putting out a two channel stereo signal. My surround amp suddenly is recognizing a digital signal, displaying 'PCM 48 Khz' when I play anything.
I still have a second High Definition Audio Device that refuses to get any driver support, so it's disabled for the time being. Disabled after the SPDIF started to work, continues to work after disabling the 2nd device. I have no ideas on what that's all about.
I'm thinking about saving up for a better motherboard. The USB keyboard isn't so cool after having driver issues, I need to get back to a PS2 keyboard. Refusing to boot on the most recent BIOS isn't so cool either!
For now, I guess I'll look into getting a component style surround amp setup, so I can use the minijacks. Probably a stack of car amps running off of a converted PSU just like what's running on my old computer.