Strange audio quality issue (5.1 source playing on MBP)

Hi,

I get strange audio distortion and poor quality when playing 5.1 or higher audio sources on my Macbook Pro.

The setup I've got is:

-Yamaha CRX-M170 amp/receiver (Doesn't have optical audio in).

-2x Wharferdale speakers (2.1 sytem).

-Xbox 360 S connected to TV via HDMI, and to Yamaha via Phono RCA cable (Through the TV).

-Maxbook Pro (2011 era) connected to TV via HDMI for video, then to the Yahama via the headphone jack using a stereo to Phono RCA cable for audio.

Note all audio is going out via the Yamaha 2.1 system.

Playing iTunes and older videos on the Macbook Pro the audio quality is fine.

However when playing newer 720/1080p movies with 5.1 or higher digital audio tracks, the audio quality is really bad, very distorted.

If I play the same movie on the Xbox instead, I don't get the same audio issues, it's fine. (Reason for playing some movies on the MBP is Xbox doesn't play .mkv's).

It seems like the issue is the 5.1 or higher to 2.1 conversion the Macbook Pro is doing. The Yamaha has a DSR-70 PRO digital decoder and it seems to work for conversion fine, Xbox has no issues.

Any ideas on potential solutions for this? The googling I've done alludes to either a toslink optical converter out of the headphone jack, an external sound card or perhaps better drivers/codecs. Not sure what to go with?

Many thanks in advance for any help!