TOPIC:

I am using PS3 to stream Netflix. When I play movies on it (blueray), it works perfectly fine. But, when I stream Netflix, it takes the sound away. I can hear the sound when I unplug ps3 input from nanoAVR and plug it straight into receiver. Its only when I bring nanoAvr DL in chain and the sound goes away. Please note that I can hear sound from nanoAVR DL when I play movie from PS3.

You're probably sending an encoded bitstream instead of MPCM. The nanoAVR can't decode bitstreams like Dolby Digital, DTS, etc.

I am sending Linear PCM therefore I can hear sound when I play blue ray movies. If my source (PS3) was set to bitstream, I wouldn't hear any sound playing blue ray as well.

EDIT: Just checked ps3 settings and LInear PCM is set under Video --> BD. Sounds like the Linear PCM is only applied to BD and therefore I can hear the sound. I think ps3 might not even have the option to convert streaming services to PCM.

Check all settings. The PS3 should be able to output LPCM for Netflix too. Do you have the fat or slim version?

Slim version. I looked into many settings but couldn't find any that looked like its PCM conversion option

Settings > Sound Settings > Audio Output Settings
Deselect all output formats that don't have "Linear PCM" in their name.

Settings > Video Settings
Set all audio output formats to LPCM

Awesome. That worked. Thx.