That's a very high end unit. Although dated, you might get lucky if the components are correct. From my understanding Toslink 2.0 (125mbps) came out in the late 90's.
"Every imaginable audio format can be decoded by this receiver; the list includes: Dolby Digital, Dolby Pro Logic II (DPL-II), MPEG, DTS, DTS-ES, DTS-ES Discrete 6.1, and THX Surround EX. If a new format comes along, and they just keep coming, you can upgrade the unit's flash memory using the RS232 port on the back. Our review unit had been upgraded to DPL-II. The upgradability cannot be emphasized enough. So many formats and features are constantly coming out, it is an important feature to have, at least for this kind of money. THX Ultra 2 has just been announced, and I imagine there will be an upgrade to the DTR-9.1 that will come along in the future. Since the DACs are 24/192, I suspect it would be possible to upgrade this unit for digital decoding of DVD-A, if the manufacturers ever agree on a digital output standard for DVD-A players. This particular review unit was used in our Benchmark event, held last June, and the guys say it is one of the best sounding receivers they have ever heard."
Source
I cannot help you with sourcing an update and then flashing, I have no idea with that unit, I would contact Oynko. Also ask them if they offer part exchange for an upgrade.
If you can get DTS-MA (+ DTS:X) and TrueHD (+ Atmos), there is almost no reason to upgrade after this, its unlikely any new formats will come for a while.
Lossless is lossless, both formats do 192khz multichannel, they can only really improve compression, add 32 bit support, or more channels.
Funny part is I'm reading eARC is fairly unstable, and further improvements require more bitrate, ahem Toslink ... xD
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Do you know anyone with an HDMI extractor with 5.1 PCM down Toslink? You could try it on that unit. Audio quality from my AMD GPU is much better than ALC889.
Also depending on the unit, the internal monitor, can be re-programmed, you can then add support for MPEG, ATRAC and so on.
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Here are some DTS audio files I made from the original, I can also make ES files if you would also like to test them. For system wide, I need an EFX encoder-transcoder.
I am hoping DTS listen to my emails, and produce an EFX encoder-transcoder with a software panel, where we can setup what we want.
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Also note, if you had a system that's eARC with a maximum bitrate of ~37mbps, and due to cheap components, cheap cables, bad grounding, too much RFI, you can only do 35mbps.
Now if you was to send ~37mbps, you can guess in general what would happen. I really do dislike conductive circuits, too much to compensate for, more price.
You will find that Toslink is not only 125mpbs, its immune to RFI and pretty much everything else conductive circuits are not.