Until recently I have been using wmpc with k-lite codec pack and had no issue bitstreaming surround formats to my receiver via asus xonar essence st optical output. I have racked my brain changing a variety of settings and was hoping someone may be familiar with this method of playback. To my knowledge the only change made was and update of k-lite codec pack at which I have uninstalled and attempted older versions with no success. The audio decoder being used is ffdshow and the issues arises when any of the pass through (s/pdif,HDMI) settings are checked that are associated with the source eg: source being DTS, when the pass through option for DTS is checked I loose audio. My apologizes if this makes little sense I am sure there will need to be more information provided at which I will attempt to answer to the best of my ability to hopefully resolve the issue. Thanks in advance for any input.

What is the output device? Are you using HDMI or xonar spdf?

Optical output only supports PCM so it won't transmit DTS directly.
Either:
- convert DTS to PCM in the software and send it that way to your receiver, or
- use HDMI is it's a possibility; it's by far the best option as it supports everything.

Hope this helps.

I am using an optical connection and unfortunately my receiver has no HDMI connectivity. Converting DTS to PCM does work but in the past any time I had watched any media with DTS or Dolby formats it would switch the receiver to the corresponding format.

My suggestion then would be to try JRiver free for 30 days; after that it's $50. IMO it's definitely worth that; it will allow you to pretty much configure anything you want they way you want.
Give it a shot.

I also use JRiver and it's the best media player for a HTPC.

You could also just use MPC-HC with LAV Filters and if you have a strong graphics card madVR. MPC-HC with LAV will play almost anything and will convert almost anything to PCM problem free. The only issue you will have is with DTSMA. For that you will need to get an additional .dll.

JRiver, LAV Filters and madVR will give you the best playback quality possible on a HTPC. With properly ripped blurays it will even beat most stand-alone players out there. If you need more details I can help.

Success! JRiver and madVR was the key. I cannot thank you both enough for your input. This was driving me crazy refusing to watch any media without the proper audio and now not only do I have what I once did but even better.

That's great to hear.

Just as a FYI, bitstreaming audio is cool in that your receiver will display DTS, AC3, TrueHD etc... but it's not actually the best way to go. In order to be able to play back all material (23.976, 24, interlaced etc...) optimally and judder free you need to be able to make slight adjustments to the audio stream. When bitstreaming this is not possible but if your audio codec (LAV) decodes the streams on the HTPC then you can use the JRiver video clock feature. The decoded audio streams are then sent as PCM to the receiver. No quality is lost and you get perfect playback with no dropped frames.

Anyhow, for now just enjoy and maybe another time we can move to the next level

Glad we could help; as Boltron said, the real fun (read tweaking) starts now.