Mceljo - I so appreciate you taking the time to help try to answer my question. That's what I love about this community - people are just so generous with their expertise here. You were correct in your analysis on how I have the outputs configured.
Kal - I did not know it was considered a transitional product. Would you, or anyone else for that matter, recommend any processor in particular? I was thinking of one of the Integra pieces like the 80.1 or the 9.9? I wanted to spend around $1,000 for a used piece here on Audiogon. I was planning on using the device for audio only and sending video via HDMI directly to the new TV I am getting in about 2 weeks - the new Panasonic 65" VT30 plasma (I'm excited about that !!).
Again - thank you so much for your time and consideration in helping me out.