A decent analog cable, patching from a stereo jack to the RCA jacks on your receiver, shouldn't degrade the sound as you describe, unless the run is unusually long. What is the distance involved?
What type of sound card is in your PC? There are some bad ones out there, especially in older tech.
Do you find you have to turn up the receiver an unusual amount for this source? The signal from the sound card may also be weak.
TOSLink would keep it digital all the way to the receiver, eliminating any doubt in the sound card or cabling for sure. However, it could be an expensive solution depending on distance. Probably no more than a new sound card though.
