OK, figured it out. After about 174 google searches looking for an answer I stumbled upon Dr. Lex's website and his C-Media CM6206 Enabler for Mac OS X. Sounded like a plot for world domination, but in actuality it's a small program written for devices that use the C-Media CM6206 chip. Apparently none of these devices work right out of the box. In Windoze it will work after the driver is installed but there was no provision made for that on Macs until this third-party app came out. It works fine now; I'm using it in stereo mode, not 7.1 so I can't speak to that. Digital output from the iMac to the Rotel really does make a difference. The soundstage seems to have opened up, and the bass sounds deeper and more defined. If my system sounds this good with a cheap USB sound card I can only imagine how much better it will be when I get a more expensive one.
iMac to Diamond XS71U SPDIF problem
I recently purchased a Rotel preamp for my stereo system. It has optical and coaxial digital inputs, and I decided to try using a digital signal path for the iTunes library on my computer to my stereo. I've been running an older iMac G4, OSX Leopard 10.5.8 with a Griffin iMic with acceptable results for a few years. I purchased a Diamond XS71U to try USB 2.0 to SPDIF optical. The Diamond isn't a high-end product by any means, but the price was excellent and it promised Mac compatibility and US support. I figured it would be a good place to start, and I could upgrade later if I liked the results. My problem is that after some delay I discovered that SPDIF out on the Diamond is not supported for Macs. Unfortunately due to things going on in my life it's been quite a while since purchasing it, and some of the packaging material is gone so returning it for a refund is iffy. I'd like to try to get it functioning if I can; I would think it's a software/programming issue, not hardware since the SPDIF output is supposed to work using Windows. I've of course tried many different settings in the Mac Audio Midi setup utility, the Soundflower audio control app, and even tried Mac developer apps such as AuLab and Hallab to see if they would do anything, but with no result. This hardware hasn't set up any preference files on the iMac that I can change with Property List Editor. I'm wondering if anyone has any ideas about any software or coding that can get inside this box and "open the spigot" so to speak. I know that it's not a huge financial loss if it doesn't work but it's become kind of a quest for me to see if I can hack this thing. Diamond tech support, by the way, is TERRIBLE so that's not an avenue. Thanks very much for any help.
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