optical audio and spoken word

Okay...so this might be a little weird, here are my specs:

Asrock extreme3 Gen3 z68 motherboard (using on-board audio connections)
Cheap/lowend RCA receiver, 5.1.

In the past I had my computer connected through rca connection without any problems. (red/white>3.5mm) But I recently bought two optical cables; one for my xbox 360 and one for the computer. On the 360 the sound is perfect with everything, books on CD, movies, TV shows...everything. But when I use my computer to play an Audio book, listen to scholarly talks or youtube videos the audio will not start for up to 3 seconds, missing the audio all together, and it will continue this for every pause one second or longer.

I've updated my Realtek audio driver.
Uninstalled the driver and preformed a clean install.
downloaded a set of Codecs (media player codec pack)
used the optical cable that does work.
Switched cables to see if there is a difference, with both cables providing the same error on the PC only.
and I've set the effects to "off" in the driver properties.

Nothing works...except one thing. I can use Pandora to play music in the back ground, even if its volume is at 1%, the spoken word plays flawlessly. I can upload a short video and share it if you need a visual/audible explanation.

I've searched online extensively and I've not found anyone having a problem like mine, so I hope that no one here has a post regarding this issue. Any insight as to why this is happening or how to fix it, would be greatly appreciated.

Sent an e-mail to RCA about the problem and they said that they would repair/replace the unit for a flat charge of $30 if I sent it to them. (would have been completely free if I had lied about the purchase date...but I'm fair when it comes to companies who actually take the time to personally respond to E-mails) I think I'll send it in and will hopefully get a new receiver to fix this problem...whatever it may be. now to see if I can get them to pay for the shipping costs there and back... ^.^