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One last thing -- it should probably work in DVD mode as well. My receiver, for instance, has a signal select for each input (DVD, VCR, TV, etc.). It can either be:
1) analog (red/white RCA inputs)
2) digital (coax or optical)
3) auto (digital if present, analog otherwise)
4) multichannel (6 analog cables)
Maybe your DVD mode is set to look for multichannel and your VCR is set to look for the digital signal.
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