1) Are you using TOSLINK or USB from your PC to NAD? If it's USB, perhaps it's a driver issue in Windows.

2) If it's TOSLINK, one test is to see if it's an issue w/ the digital connection. I did a similar test w/ my Tivo and Pio 45TX. My optical on the Tivo seemed broken. So I got an optical to coax converter box at Ratshack for $30. Then I connected to the digital coax, instead of optical, on the Pio. Still didn't work, so it meant that my Tivo optical was broken. Perhaps the NAD might like the coax better...