I don't know about the audio out problem. I have no audio going in or out of my TV right now (all through my a/v receiver). See our posts above about component video in. You must use AV4.
You probably got it working by now (3 months later), but I will share my experience in case it benefits any others. Just received the 34PW8520. I had to use a different AV on the TV (AV2 I think) to even see the DVD picture. Then I made the switch in the back of my Philips DVD player and changed...