Hi there,
Okay, as I thought, the BD/DVD settings don't seem to affect games, but in the opposite way to what you're thinking above i.e. no matter what you have the BD/DVD setting on for the HDMI output, it seems to always decode onboard and send out as PCM. The only way I could get Dolby Digital to come up on the amp was if I hooked the PS3 up with an optical cable and set the Onkyo to use this for the PS3 input, then switched the PS3 over to optical output on the sound. I was trying this with the original
Resistance: Fall of Man game (don't have
Far Cry 2 I'm afraid). Incidentally, no matter what I set the BD/DVD settings for the optical output to, the PS3 always bitstreamed the game soundtrack, so it was always Dolby Digital for the amp to decode. The main point was though, no matter which way I had it hooked up, all the sound was working as it should i.e. dialogue coming out of the centre speaker, surround effects all working as they should be etc.
My guess on this is, Sony have tried to be clever. They believe that the decoding onboard the PS3 is the best that can be due to its cell processor, so for games, when hooked up with the HDMI cable, they've decided they will always decode the formats onboard and send to the amp as PCM (just as they do for HD audio soundtracks on films). It would appear you have no choice on this - at least I can't find a setting. This explains why you and I both get
Multich on the Onkyo display - the PS3 is doing all the decoding onboard.
On the other hand, Sony know that the optical connection doesn't have the bandwidth to send Dolby Digital 5.1 uncompressed over an optical connection, so with games, once again, it ignores what you've chosen for the BD/DVD settings and just outputs the signal as bitstream for the amp to decode. By doing this, for games at least, they're basically trying to guarantee the person gets the best sound possible. This is probably an attempt to make the games side simple so people who buy it as a games console don't have to worry about all the different possible formats a game's soundtrack could be in, it's just plug and play.
The main question then is why you're getting odd sound from the game and I'm not sure I can help on this I'm afraid. I remember there was a post I made earlier on with people with
LittleBigPlanet also getting strange issues with sound that I wasn't getting. I'll see if I can find it...
EDIT -
here it is, though looks like in this case, it was an issue with the guys speakers connections, so if a test tone is working okay for you out of all speakers, I'm stumped...