Low level inputs? As in seperate RCA's for each speaker? Yes it does have those (i'm using a Denon AVR 1400) however I'm using a ps3 as my blu-ray player which obviously doesn't have analog outputs like that so unfortunately HDMI is the only way to go.
Casey, in terms of selecting downmix do you mean selecting the stereo track in the DVD menu or selecting an option in the PS3's menu's which automatically downmixes 5.1 signals?
Are you saying that the AVR get's confused and is unable to properly separate the 5.1 channel's it is receiving into just 2 speakers?
What I'm thinking of doing is going HDMI from PS3 to Pana plamsa then digital optical back to receiver. It's my understanding that the TV will only send a 2 channel downmix back to the mixer anyway, is that correct? (I have a TH-P42V20A)
