SPDIF Dropout Issue During any Playback

[Somperson]

Windows Version: XP
CPU Type: Sempron 3400+
HDD: Seagate 2x 400gb
Memory: 512 @ 2100mhz
Motherboard: Asus on board Compaq
Motherboard Chipset:
Motherboard Bios:
Video Card: Nvidia 6600
Video Card Driver: Latest
Sound Card: Realtek Ac '97
Sound Card AC3: SPDIF


I'm running a Compaq computer I got for $140 at compusa last year, with a few upgrades.

Sempron 3400+ (939)
512mb ram, which I believe is at 2100mhz bus because I found another 256 stick somewhere around the house
about a terabyte of HD space
Nvidia 6600 pci-e card
Audio is SPDIF over onboard sound (Realtek AC 97).

I run SPDIF to an amp with AC3 filter. Everything works great DD/DTS/PCM whatever. But reguardless of what player, wmp, mediaplayer classic I have issues with audio dropping out. This is on every type of file also. Dvds/TS/h.264/Xvids and anything from 2ch to 6ch surround. There isnt a delay or anything when the audio is comes back (1 second pause maybe?) after being dropped. I can def. tell the receiver is loosing the bitstream...

I have tried the following...

Update all drivers
Different codecs
Different players (I use MediaPortal for the HTPC App)
Different AMP -- Only issue is both pioneer amps... same line/year but different models
Different HDTVs

I'm guessing it could be the onboard sound, but its only sending out the bits and doing no conversion what-so-ever. Could it be lack of RAM? Anyone have any solutions... Im running low on options.

Jason