The 981HD doesn't have an "audio only" option like the 970HD, so we can rule that one out.

It really is odd, Ron - I've had a 981HD in my system since last October and it's run through my 990 the whole time without a problem. Odd that the DVI input works with other sources and the 981HD works bypassing the switching, but it doesn't work when you switch it. How long are your video cables?