How to get a Meridian 518 to pass a DD 5.1 signal?

I have a Meridian 518 / 562 v1 / 565 (no Z3/DTS upgrade) processor in my surround system. The 518 has been updated by Meridian with the latest hardware and software (I sent the 518 to Meridian in Atlanta for the upgrade last summer) but will not pass a Dolby Digital 5.1 signal as the upgrade is supposed to allow. It will pass a PCM bit stream. And the 565 will accept a DD 5.1 signal directly. Any suggestions? Is there a secret to the set-up that I am missing?

Before I send the 518 back to Meridian, I would like to make certain that I have tried all the configuration and set up options.

Thanks.