hd-pvr+spdif=black screen. IT LIVES!!! no no...it's dead.

[sDiesel]

tldr;
want to record 5.1dolby digital
hd-pvr optical input works from tv(pcm 2ch stereo), optical output works as well.
directv set top box is coaxial, needed converter box to optical(qvs/monoprice coaxial2optical).
converter box works when plugged into receiver(pcm, digital is clicks - using prologic receiver).
converter box plugged into hd-pvr gives black screen in TME/sage, hauppauge documentation says no spdif signal = black screen.
ac3filter installed(needed for 5.1 recordings?????)
computer does not output hdmi video or spdif audio - headless server with hd-pvr for recording and passthrough.
cant figure out what is at fault, converter box, hd-pvr, ac3filter, etc.
do you have hd-pvr recording on optical with digital dolby?? could you please post your setup(ac3filter installed or not, what setttings used. hd-pvr drivers used. sagetv decoders used. etc).

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hello!
first post, but ive been following this place for the past six months or so. figured id get back into the dvr universe(2002 with an ati all-in-wonder radeon was my first dvr dive). spent lots and lots of time researching and reading to build a system that could run sagetv/mediaportal/mythtv(settled on sagetv for a number of reasons) and a plex server.
i ended up with a system with the following specs

ibm ps/1 consultant case(because old off-white case are nerdy)
a6-7400k
ga-f2a68hm-ds2h
4gb ddr3 ram
3tb hdd - will support 4sata in raid at later date
dvd drive
usb wifi(not smart i know, but cheap and less cords for testing)
hd-pvr
ir blaster to directv stb(h24)
component from directv
coaxial to optical converter for 5.1 dolby from directv
may add a hvr-1800 for ota stations(yes i know the hdhomerun is the better choice, but i need the a/v input for digitizing vhs. hd-pvr has them but will be used for directv only).

software
win7
sagetv v9
hd-pvr v1.7 drivers
ac3filter(dont know what im doing with that yet, could be the major malfunction)

things have been off to a good start. computer works well and most everything seems to be working fine...till ya get to the hd-pvr(read many positive and many negative things about hd-pvr/colossus).
composite input works(for testing)
component input works
component + spdif works....ish
no spdif = black screen, as per hauppauge documentation

now ive tried a few things and feeling like im dealing with quantium theory(it's there, not there, but it's really there....and not - at the same time).

items in () are cables
directv h24 was set to output pcm and dolby digital on each connection
receiver is a OLD pro-logic with pcm2analogLR

stb----(hdmi)--->hdtv----(optical)--->hd-pvr----(optical)--->receiver
works, but requires hdtv to stay on to record sound - comes out 2chan pcm from hdtv(from TME info)

stb----(hdmi)--->hdtv----(optical)--->hd-pvr
works, but requires hdtv to stay on to record sound - comes out 2chan pcm from hdtv(from TME info)

stb----(coaxial)--->coaxial2optical----(optical)--->hd-pvr
no dice, no sound input in TME/sage.

stb----(coaxial)--->coaxial2optical----(optical)--->receiver
works, pcm comes out as sound, digital comes out as clicks

dvdplayer----(coaxial)--->coaxial2optical----(optical)--->hd-pvr
no dice, no sound input in TME/sage.

dvdplayer----(coaxial)--->coaxial2optical----(optical)--->receiver
works, pcm comes out as sound, digital comes out as clicks

have another dvdplayer with optical output that'll ill try and test later, but im expecting it to work no hitch ><.

at this point i have no idea what is the fault. the hd-pvr seems to have a working optical input and passthrough is working as well(pcm from tv). my thought is the coaxial2optical converter box...even though it works to the receiver. but...i also have no idea what im doing with ac3filter(more reading required) and if that could be the problem. this is a headless server, plan to use roku/firetv/etc to watch recordings(livetv isnt really our thing).

any ideas are appreciated, would just like to record 720p/1080i with some darn 5.1 dolby digital. at this point it'd be cheaper for me to get a lifetime playon sub and get 720p 2ch stereo videos. hd-pvr 5.1digital was the selling point for me ><.

thanks sagetv community.