If you are running only two speakers, I'd recommend using the Dolby 2.0 track. It sounds like the EX flag is trying to force the 1050 into Surround 6.1 processing mode. This issue relates to a bug in the 1050 and some other receivers of the same vintage (before Dolby Digital EX processing was available for licensing) - there are two forms of EX flags that have come into use that did not exist when the 1050 was developed and that can cause the receiver to try to switch to 6.1 mode. Setting the rear center speaker to "on" alleviates the problem.
The down mixing on your Akai player most likely refers to how the stereo analog output is created - the digital audio output ought to be untouched by the player.
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