I haven't read the whole thread, but there is a really easy way to test
the digital outputs.

Do you have a receiver that can decode Dolby Digital (AC3) or DTS?

Go here:
http://www.sr.se/cgi-bin/mall/artikel.asp?ProgramID=2446&Artikel=740607
and download/unzip a DTS or AC3 file. Play it on your Squeezebox (volume
must be 100). The files are compressed, and if your receiver does not
get a *perfect* signal you will hear nothing at all or just static.

Works fine here btw. Good luck.


-- 
bosco
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