I was having a problem with the new bitstream/PCM options but I managed to get it figured out. Hopefully this will help someone out.
I have everything set to bitstream
When I selected my HDMI device in Options->Video->Playback device, playback would fail.
If I selected "same as device used in audio playback," the audio would skip (especially with AC3 tracks) causing choppy video playback with Videoclock enabled. This made it impossible to watch all dvd ifo and vob files. After much tinkering with splitters/filters/renderers I found that they weren't the problem.
By setting the playback device to "Default windows playback device" all my problems went away. I could bitstream everything with LAVSplitter and no more choppy playback. I use WASAPI for my music audio just fine and bitstream all video audio.
I have no idea why this is the case, but maybe that can help someone else.