I finally figured out that my PC graphics card does not support DTS / HD (gfx 570). So after 5 hours of research i notice in an article that someone mentioned getting a laptop for HT. Well, it dawns on me that I have a laptop (gfx 555) and guess what, it is supposed to be able to bitstream, so i plug it into my AVR and set the PC sound to 7.1 channels (in the sound options), and 192k sampling. And presto, my AVR now says that I am in dts HD mstr. Woopie!
However, when i check the info it says the same but it has a sampling rate of only 48kHz and set to 7.1 I was expecting 192kHz. I am playing the blue ray version of the Hobbit using cyberlink 9.6, with cyberlink set to HD pass through on audio (3rd option down).
What am i missing here? i think cyberlink 9.6 might not support 7.1, could that be the issue? going to try a 5.1 configuration and see if that helps.