Oh, I would expect the same decoding capabilities. My question was not about that, but rather what audio was being sent over the HDMI outs to the TV.

See, the TV describes its audio capabilities via EDID. So, if you connect a TV that only supports two channel LPCM directly to a BD player, that's what it will send. With a pre/pro in the middle, the pre/pro will send a combined EDID to the BD player that contains the TV's video characteristics and its audio capabilities so the BD player will send better audio because the pre/pro handles the audio. What audio then, does the pre/pro send to the TV? Nothing? A downmix compatible with the TV? Usually, when splitting HDMI, the lowest common denominator EDID is sent to the source, though of course this does not happen in a pre/pro.

Here's why I ask: what if the downstream device reported 7.1ch LPCM capability? Would the 976 send 7.1 LPCM to it? Or, because the 976 expects a TV, and no such TV exists, does it just send a 2ch PCM downmix anyway? I would expect the main output might be so restricted but a secondary zone output (with its own pre/pro) might not.

I would not expect the pre/pro to transcode (say decode DTS HD MA and encode to Dolby TrueHD to the downstream device) but it might send the best LPCM mix the device says it can handle.

Here's why I ask: if I put a nanoAVR HD and nanoAVR DL and 8ch HDMI audio DAC downstream of the secondary HDMI out, and the pre/pro can send 7.1ch LPCM out that secondary HDMI output, the pre/pro could combine the 7.1ch analog result with the video for each source selection.

Practical upshot: you've just added Dirac Live to your 976.

The alternative would be a DDRC-88A between pre/pro and amps but that adds a A/D -> D/A step.

If the pre/pro could define a source by video from one HDMI input and audio from another that could avoid the external DAC but I doubt it has the extra HDMI decoder for that.