I'm a bit confused for which I apologize. During the BluRay movie, were you experiencing 5.1 surround sound or just stereo. I'm not familiar with your Panny AVR but will it tell you what type of audio is being output while it receives the PCM input? This would give us a good clue.

Also, PCM is not so much a format but a method of transport to get your sound format from one box to the next.

One thing you are correct about is that it can get very confusing with what options to pick to ensure you get a surround sound format to play via a PS3. Works seamlessly after you get it right though.

I'll be back with correct settings once I remember where I put them or looked them up.

With great power comes Awesome irresponsibility.