Optical cables do not carry HD Surround. As far as where the problem is, there is a chance it's before the receiver, but maybe I should have said that since you lose video and not audio points to it being after the receiver. hdmi handshake can be voodoo. It could be the PS3. Like I said way back, I had a Panasonic BR player that kept dropping hdmi, regardless of how many cables I tried. I have a lot of equipment, and nothing else drops. I do know that when there is an hdmi problem, it can be infuriating trying to find where the problem is. It's frequently not where you think it is.