When you select LPCM for the audio output, at the window where it lists the various channel configuration, are the appropriate boxes checked? (or unchecked?) i.e. for a direct connection to a TV, I believe only 2.0/Stereo PCM should be checked. The PS3 should typically detect all the supported PCM channel modes, but maybe that's not happening for some reason, and you'll have to select the correct one manually.