Please help, audio trouble

[CabinDweller]

I apologize if this is not in the right section.

I recently bought an LG BD370 blu-ray player. I connected it to my TV via HDMI. I have a Panasonic all-in-one (HTiB) surround sound system. I connected the blu-ray player to the HTiB via digital optical cable. Here is where my frustration starts... If I play a DVD in the blu-ray player, I get full (5.1) multi-channel audio. If I put a blu-ray disc in the player, I only get 2 channel audio.

Why would a DVD allow the player to work properly in DTS Re-Encode mode but a blu-ray disc will only produce sound in PCM stereo mode? If I go into settings and select any format other than "PCM stereo", no sound will be produced from the blu-ray disc.

Please help.