no sound from optical input on onkyo 605

I am trying to output the audio from my PC to my Onkyo 605 through the optical spdif connection but I am getting no sound out from the speakers. When I check the mixer on the PC it registers that the audio is being output. I have setup the onkyo so that the CD input is set to optical 1 but there is no sound coming from the speakers when I choose this input.
Maybe this should be in the HTPC forum but since the sounds seems to be output from the PC I think it is a problem with the receiver settings.

Thanks

Dave