PC to Denon receiver problem - help!

Hi everyone - 1st post. [:)]

I have a Denon AVR-1906, which I've connected up to my PC via the optical spdif. The problem is: the receiver display indicates that the signal is coming through, but no sound. I'm using media monkey which is set up correctly to output to my sound card digital out. I've re-assigned the digital inputs (a thousand times), switched from 'auto' to 'pcm' and back again, but to no avail. I've changed optical leads, but as it's apparently receiving the signal this seems a red herring. The PC output works fine through a friend's amp, so it's not an output signal problem. I'm at a bit of a loss basically. Could anyone suggest something I'm not doing? Could the dac have exploded or something?

Any help would be gratefully received.