That lossless audio is the best thing about Blu-ray. I'm replacing my DVDs for that reason alone.
As far as one particular source triggering the HDMI failure, it has happened when switching to any of my 3 inputs (dumb luck with only 3-4 occurrences). The source equipment is fairly current and I've never experienced a problem before.
The HDMI issue is the only true letdown. But it only happens during a switch and the unit power cycles pretty fast (much faster than the 'ol Denon).