James, have you tried testing the player out on a regular receiver/pre-amp via single coaxial audio connection for each output?, again check the following as you connect up and before you play:

downmix to 7.1
all speakers to ON
all speakers to large
all speakers to 0db
all speakers to 10ft
dynamic range OFF

my testing is done isolated with these settings, I very carefully and thoroughly listen to all 4 outputs this way, the player was perfect both times I shipped

static only happened when the analog audio setup was messed up

please continue to let us know James, this is the funkiest thing I have seen in a long time

thanks and sorry for your problems getting this going

-Gary Murrell
http://www.custom-ht.com/oppopowerbuy.html
My Personal HT setup