Umphrey,
Have you tried AC3Filter and its pass-through options? I have had better success with it than with FDDShow.
www.ac3filter.net
In general, the SPDIF pass-through during video playback is controlled by DirectShow filters. ASIO and the speaker options in Windows Control Panel are not usable for that.
What sound cards do you have? Do they provide any SPDIF options in the device specific control panels?
I have tried a great variety of settings, including ac3filter. Yes, I have configured the sound card's respective control interfaces for SPDIF. My sound cards are, EMU 1616m, M-audio revolution 7.1, and Chaintech av-710. For DVD, the closest I have gotten to bit-perfect is a dts signal being recognized for a few seconds, but it jumps back and forth from being a recognized signal to being static.
I have played a video with DTS encoded sound through winamp using its ASIO plugin, and I was able to get bit perfect output with the DTS being recognized. I played the same MKV with MC, and try as I might, I could not get it to pass a bit perfect signal, nor use ASIO. I find this quite frustrating, so my question is this, is MC capable of using ASIO for ANY video?
MerlinWerks, thank you for that link, it was quite an enlightening read.