Apple TV audio issues.

Equipment:
Windows 7 Pro PC
(2) Apple TV (the black ones)
Hardwired internet connection.
HDMI to component video converter w/digital audio

Problem:
Music found in home sharing library plays fine.
Some TV shows play fine.
Movies played directly from internet, not from library, for example, preview, play fine
Movies in the library play video (excellently BTW) but no audio.
menu feedback sounds play fine, clicks, beeps, etc.

Steps taken so far:
All devices updated to most recent firmware
Audio changed from Dolby "on" to "auto".
Attempted to select movies in library, then advanced, but convert for apple tv greyed out.

In my limited understanding of the process, it appears to me that the movies are being incorrectly saved when downloaded from the itunes store, but that should be automatic, shouldn't?

Apple support was unable to solve the issue, oddly enough.

In addition, we purchased all the equipment at the beginning of the retrofit project, roughly 4 months, and now, new out of the box, they won't support it, based on the date of purchase, rather than by date of activation, unless of course I would like to buy a support package.

Hi davidcaughman,

Thank you for your PM earlier.

Your post is strangely robotic with neither greeting or salutation which may be putting off people from helping you. Things are a bit 'meh' with me at the moment and I am full of a cold but will do my best under the circumstances.

My assumption is that your ATV's are ATV2's and not ATV3's judging by the timescales.
On the ATV2 the setting options for audio should be Settings>Audio & Video>Dolby Digital Out either ON or OFF. If you are don't have DD decoding equipment then set this to OFF.

Your selection of movies downloaded from iTunes puzzles me because there are perhaps only 2 formats (MP4 and MOV I think) which are ATV compatible and it's possible that you may have your download settings set up wrong for iTunes because you are on PC and not Mac, although I can't say for sure because I haven't used a dark-side machine for at least 7 or 8 years.