Make sure the Blu-Ray is sending it in the correct format. I think if I remember correctly, my 350 out of the box was set to the wrong mode.
Check the setting in the set-up menu (Sub menu 'Audio Settings', sub, sub menu 'Audio (HDMI)' is set to Auto not 2ch PCM.
Also check the Dolby Digital & DTS menus are not set to downmix PCM. I also set the 48khz/96khz PCM to 96kHz/24bit, but to be honest I don't know what that last bit does!
;-)