Hi
I have also had a great deal of difficulty connecting the PS3 to a Mk2 BV7 but fortunately, my setup has now been running well for the last six months. It plays the blue ray discs and the games with excellent video and audio and we are very happy. I am not an expert in these systems and have simply chopped and changed the settings by trial and error before eventually coming up with something that worked. I haven’t a clue whether the same settings will work with your Mk1 BV7.
The TV is connected to the PS3 with a DVI to HDMI cable.
The optical connection from the PS3 passes through a converter and connects into digital audio A4
I have the TV set as VAUX with the A4 and DVI options selected.
The settings I use on the PS3 are as follows:
Sound settings / Audio output settings / Digital out (optical)
Dolby Dig 5.1 Ch is selected
DTS 5.1 Ch is also selected
Linear PCM 2Ch 44.1kHz and Linear PCM 2Ch 48kHz both appear selected in a grey box.
Video Settings
BD/DVD audio output format (HDMI) shows Linear PCM
BD audio output format (optical digital) shows Bitstream.
I can’t find any other settings that might be relevant but if these work for me, they might work for you.
Have fun, but if you do get it to work, it is worth it.
Regards
Geoff.