I have an Apple TV connected to my BV7 via SPDIF - I use it to listen to music from iTunes - is there a way to distribute the sound to other rooms via BeoLink without an analogue connection from the AppleTV to the BV7?

I don't believe there is, why can you not connect the analogue L&R  to the BV7?

I suspect the OP finds the time delay between the digital signal as heard in the main room and the analogue signal in the link room to be objectionable. This effect can be minimized by changing the Sound Delay setting under Monitor/Sound Adjustments in the hidden Service Menu from the default number (I forget what it is) to 0 (zero). Unfortunately, this does not eliminate the problem completely, but it does make it more or less bearable.