PS3 audio from SCART output distorts on my new Sharp Audio System: xl-dh259n

I bought a new Sharp Audio System XL-DH259N. It replaced an older panasonic system. I have several devices connected to it (Cable TV, Wii and PS3). The PS3 video goes to HDMI. But, the audio is connected via SCART to a Radio Shack RCA selector (the selector takes many RCA inputs and outputs them to one output cable which is RCA to 3.5 mm stereo jack. The 3.5 mm jack goes into the audio-in on my Sharp Stereo system (It does not have RCA inputs, it has one "audio-in" which looks like a 3.5mm input). The sounds from all the other inputs are fine. But, the PS3 output distorts severely during times when something is exploding (e.g. a tank).

I am about to give up and junk the Sharp system and go back to my older Panasonic system. I thought I send this out to the group and see if anyone else had a similar problem and can help me.

Help! Thanks.
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  1. Have you tried outputting audio through the TV to see if it distorts there as well? It seems strange that the PS3 is the only one.

    After digging around online I see audio issues like yours show up a lot but for different reason. Have you looked into those much?
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