bump.
 
I'm really perplexed. If you have any thoughts, I'd love to hear them!

Thanks for replying!
 
Lets see... I only mostly understand what you're saying. For the nvidia control panel the only thing that I see related to this is "display->Set up digital audio" which only gives an option to "change windows sound settings" and that pulls up the "Sound->Playback" menu through windows. Is there a different place to enable/disable audio for the graphics card output?
 
Next, I'm actually not sure if I'm passing audio from the receiver to the projector since the projector doesn't have speakers (or an audio output). I'm certain that there is no audio processing that happens at the projector in any case. The receiver has HDMI pass through (three inputs and one output) so that the video (and possibly the audio) is passed along to any connected display.
 
Here's what I'm watching, when it looks like 1 and the receiver is on sound is working, when it looks like 2 sound is not coming through (which is about how I read that).
 
1 is displayed when the projector is off and the receiver is idle or ready or in standby.
2 is displayed when the projector is on or the receiver is in the process of turning on or to standby (about 5 seconds for the reciever to turn on or to standby and be recognized).
 
As far as I can tell, the receiver will process the audio when using HDMI pass through. Currently I have an xbox hooked up to one of the HDMI inputs on the receiver and the pass through process works as desired (xbox hdmi to receiver, audio out of receiver speakers, receiver to projector display works).
 
I would just send digital video to the projector and then hookup audio from the computer to the receiver but I don't have any HDMI on the projector to spare (alas no DVI on the projector). Not that this scenario is even an option, but I don't have a digital audio out from the computer other than the mini HDMI on the graphics card so that would be less than ideal, plus all the extra cables...

I was about to report bad news because I had that option... only when the projector was off. When I turned my projector on the option to select "connection type" went away. So I thought it was just a case where my graphics card hated my projector and did want to play with it.
 
Just messing around, I thought "why don't I just set it with the audio enabled option before I turn the projector on" since it's not an option when it's on I figured that it would just undo that setting because the setting simply wasn't available. Low and behold! It totally worked. Yay!
 
Thank you so much for your help! I was about to give up and buy crappy computer speakers (so close I even had a cart assembled at amazon.com with an $8 2.1 set... those would have sucked).

Further developments...
 
I was able to get the audio and video to work out of my graphics card to my receiver and projector via HDMI... for a day. Now when I go through the same procedure that yielded results the first time it simply just refuses to play audio while the projector is on. I didn't change my setup or settings when it decided that it didn't want to work anymore... UGH! This is getting to be a bit frustrating.
 
I ended up trying the driver update again (260.99). This time it didn't result in negative change, but it didn't help either.
 
Since it did work (at least for a little) I have renewed hope that it's possible... just I've run out of ideas.