Thank you for your concern Gonk.
I watched LotR and experienced no audio dropouts while utilizing the Coaxial inputs.

I do have the non-existent 6th speaker enabled. I only experience intermittent dropouts while using the Optical. Coax appears to function correctly. I'm vaguely familiar with the "bad flag" issue. Last night the dropouts occurred during Pixar's "Bugs Life". Is this title known to have bad flags? And if it does have bad flags, why does the sound not drop while utilizing the coax connection?

A few weeks ago I did contact the Outlaws and they suggested I try different DVD Players and cables, so I did (to no avail). Looks like I will contact them again this week.

I must say that I am duly impressed with both the sound quality and quantity this unit produces as well as the features it offers based on its price point. But the Optical dropouts are definitely the fly in the ointment.

-Bri