I just hooked up my 2011 Mac Mini 2.5 GHz Intel Core i5 running Lion and I'm unable to output sound via the optical connection.
The new Mac Mini is connected to my TV via a HDMI cable and I'm using a Toslink cable to connect the audio to my receiver from the Mini.
All the audio options on the Mini seem to indicate only two audio out options: internal speaker and HDMI audio. There appears to be no optical or analog audio out available.
I've looked in the Sound Prefpane, Audio Midi Setup and even the excellent Sound Source menubar app from Rogue Amoeba to no avail.
The audio setup was working perfectly on my Late 2005 Mac Mini running Snow Leopard, but that's using a DVI to HDMI cable and a Toslink audio hookup.
Any thoughts on how to fix this?
It turns out that when the audio output is set to HDMI, you can't use toslink.
Apparently, you have to send audio via HDMI, then spit it out from the device connected to that HDMI connection.
In my case, HDMI goes into my HDTV and I went from the TV back to my amp with a toslink audio cable.