Well this is how the story ends. I replaced it with a Yamaha RX-V995. After hooking it up and listening to it and using it for a few hours I think it was definately the right choice. It has 4 optical inputs vs. the 1 that H/K gave me and it lists for $100 less. I also checked out http://www.audioreview.com
and there were several reports on the AVR-65 doing the same thing I was experiencing. Well I guess I live and learn. Reasarch first, not after.