Just for clarity: When your Denon shows PCM as the input, that's because MC is sending PCM to it. PCM is uncompressed and is a full bandwidth full quality format. You're not losing anything.
Why is MC sending PCM? Because MC is acting as the decoder: MC's internal algorithms are converting from the various formats (AC3, DTS, DTS-HD, etc) to PCM. Guess what the Denon does when it receives multi-channel formats like DTS? It converts them to PCM!
So really this is just a question of which component is doing the conversion. If MC and the Denon both follow the specs of the format, then the results should be identical. As in BIT IDENTICAL. I've read (and heard) all kinds of crazy BS about how much better "my receiver" is at converting DTS (or other surround formats) than MC is. But, to me, this is all a bunch of wild speculation and "buyers loyalty" because they spent so much money on their receiver.
Unless the receiver manufacturer is doing something that's beyond the spec of the format (like adding in their own surround effects, tweaking the equalization without telling you, or playing psychoaccoustic tricks), then the results will be identical from MC. Think about it. What would a receiver be doing differently than MC? The spec (for each surround format) is the spec. You either decode it properly or you don't.
The only real compelling reasons to use your receiver for decoding are:
1. The speaker size/distance and subwoofer management in your receiver are much easier to use, or don't work with a PCM source.
2. You have a large collection of movies that contain surround formats that MC will not decode.
Otherwise, it's pretty much a wash.
Why am I writing SO MUCH about this subject that doesn't even affect me? Because I watch discussion after discussion about this and about the difficulty of getting bitstreaming to work with every single format. Bitstreaming is tricky to set up for whatever reason. But here's the thing: You aren't really gaining much unless #1 or #2 above apply to you.
All of this, as usual, is just my overly opinionated perspective. Do what makes you happy. Which might include ignoring me!
Good luck,
Brian.