So here is my problem: I have an active HDMI splitter (1 in, 2 out) from which I am trying to connect a projector (using HDMI) and a 4:3 monitor using HDMI with a DVI converter dongle on the end. The HDMI splitter is being fed by my PC.
When I plug my monitor into the loop, I am no longer able to send audio on to my projector via HDMI. As soon as I take the monitor out of the equation, the audio returns.
I know that DVI does not support sound, but if you could help me understand why having a DVI adapter at one end of the loop breaks the audio it would be a huge help to me!
You are correct. HDMI carries audio and video but DVI only carries video ( audio needs to be routed separately). That is why you are having this issue. I have had similar applications in the past and they only way is to route audio separately. I have used KVMSwitchTech's HDMI Splitter and DVI Splitter products in the past and they have worked well for all my applications for far. http://www.kvmswitchtech.com/hdmi-splitter-c11622.htm
HDMI carries audio and video over a single cable but DVI only carries video. The problem is probably coming from the adapter you are using because it is not passing audio. You might want to look into getting an active converter that supports both video and audio.
This is not entirely true. I have a Gigabyte GV-N450-OC-1GB (Nvidia GTS 450) video card that puts out audio on the DVI connector. I use a passive DVI to HDMI adapter, and I get audio on the HDMI. It might not be specified, but many vendors are doing it.