Does the optical audio out work?

I have the ATV HDMI connected to a HDMI switcher. The switcher output connected to an Asus 27" monitor. The other 2 units on the HDMI switcher is a PS3 and a Tivo. I also have a TosLink switcher for the audio on all the units. The output of my TosLink switcher is going to a Fiio D07 converter to get 1/8" stereo jack to a boom box. The PS3 and the Tivo units work fine. Meaning, HDMI for video works great and their optical audio outputs create line level signals which I can amplify through my boom box. Now the joy. When selected, the ATV shows up fine on my monitor. But I get no audio from the TosLink switcher.
Optical signal (light) verified: Check
Tried alternative channels on the TosLink switcher: Check (PS3 and Tivo work fine in all channels)
I have tried turning Dolby Off, Going to 16 Bit audio and all of their configurations.
I do not get errors relating to HDCP.
What I thought was going to be simple is turning into something unexpectedly frustrating. I would like som assistance before I remove the ATV from my "home theatre".

I wheeled an old HD TV into the living room. Took the HDMI from my ATV and plugged into the HDTV. The Optical output from the ATV still going to the switch and nothing happened. I then unplugged the optical audio cable from the ATV an used the optical output from the TV. Still nothing. Then, probably for the first time in my troubleshooting, I went directly from the ATV to the Fiio D07 and it worked. I was suspicious of the HDMI still in the HDTV. I turned off the HDTV. I still had audio. I unplugged the HDTV. I still had audio. I plugged the HDMI back into the HDMI switch. There was a noticeable pause in the output but in less than half a second, audio was back. So this got me thinking either the ATV got something from the HDTV while it was in the system that hasn't reset yet OR something might be interfering with my signal in the switch.
I found an old 1.5ft Toslink Monster cable and used that to go from the TosLink switch to the Fiio D07 and I got it to work. I also noticed that if I jostled the cable at the Fiio D07 I could get the audio to flicker in and out.
Its not ideal, however at least I know I can get it to work. Maybe I should have spent a little more on the TosLink switch or cables.
Thanks for your help!

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