When you installed the ATI drivers, did you do a custom install or a normal install? If you did a custom install make sure to include the HD Audio drivers. Other than that, not sure what it could be.
I custom installed and made sure to ad the hdmi files. In fact I always custom install everything when asked. (I don't care for desktop shortcuts) lol.
I think this thread may be mute. Seems to be (from what I could find out) a driver issue. "Handshakes" etc...
Thanks for your response though.