the receiver must be hdmi 1.3a certified to get the audio you're trying to get.
just because it has hdmi upconversion doesn't mean it can handle all of the audio requirements.
my recommendation would be (and this may get some laughs) an onkyo home theater in a box. reason being for this is onkyo has a lot of mid range receivers that are 1.3a certified, and they overpower their receivers that come in a packaged set. maybe just sell the speakers to offset the price even more. you want to find a high powered receiver with a total harmonic distortion (listed as THO) less than 1%.
a receiver with hdmi passthrough will do just that, pass through any information and allow for switching.
a receiver with hdmi upconversion will take any video source, encode it and transfer it to hdmi output, but won't give you all the capabilities of hdmi.
a 1.3a certified receiver will include both of the previous functions, fully process the audio, and in some cases, allow for the controlling of the devices through each other. for example, when i turn on my old bluray player, it would turn on my tv and set it to the right input automatically.
hope this helps.
the previous post shows a good receiver, but at 90 watts per channel.
that htib has 130 watts per channel, so when you turn it up you won't hear as much of a hiss in the speakers. it'll run $549 instead of $280, but you've got 7 speakers and a subwoofer that you can sell to help.