Should work. But maybe it would be easier with a Gefen 4x2 switcher/splitter. It`s for 4 HDMI sources and 2 displays (outputs).
http://www.gefen.com/kvm/dproduct.jsp?prod_id=8177
Connect the first to DVI input of your BV7-40. The second can be connected to a HDMI - composite downscaler CM-388
http://www.lektropacks.co.uk/view_product_standard.php?product=1001184&show=55&sub1=55
Connect the analogue video- and audio outputs to the same port of your BV7.
The Gefen switcher can be controlled via PUC. That`s all. Less devices, less cabling.
I had a similiar setup with a Gefen TV splitter, a Gefen HDMI - composite scaler and a Philips Surround headphone amp to convert the digital audio from my TVIX 6500 box to analogue stereo for linkrooms. It worked, everything in sync.
Stefan
Yes, we are mad.......