I am happy to report that I finally got around to installing this latest firmware and it has completely done away with several OTHER problems besides just the 'no audio' problem (although they are offshoots).
I haven't really had the problem where I change audio source or turn the unit on and have no sound since the update before this, but I was having a ton of problems with my DirecTV HR20 DVR's optical output that seem to have completely disappeared.
This unit has a tendancy to drop the optical signal between steps of just about everything it does - when changing channels, especially between 5.1 and 2 channel audio it drops the audio, and using its built-in media player it drops the signal between each track while it loads the next one. This was causing a loss of 5 - 6 seconds of audio at the beginning of each track while the 1070 re-synched to the new signal, and if I changed channels often enough it would eventually confuse the 1070 enough that it would just drop the audio altogether requiring me to cycle the unit with the standby button to get audio back.
I am also part of a group of people beta testing new firmware for this DirecTV receiver and while many changes have been made to improve that unit this issue still hangs on persistently.
Till now - the Outlaws have made it go away, and I'm quite impressed!
THANKS!