No Dolby True HD signal?

Hello all,

I'm a HT novice but just connected my new Denon 4308ci to my PS3 for some lossless audio goodness. I put in Nightmare Before Christmas which is encoded with a Dolby True HD 7.1 soundtrack. The receiver shows that it is playing a 7.1 soundtrack but reads multi channel 7.1 not dolby true hd. I'm assuming that it isn't playing the best possible soundtrack and I'm wondering why. Am I not using the right cable (I'm pretty sure it's an hdmi 1.3)? Is it a problem with the ps3? Also, I've heard the ps3 won't decode dts HD soundtracks is that true? I need help.

THanks in advance.
AFAIK, the PS3 will output decoded DolbyTHD as LPCM without any loss. This is normal and you are fine.

How long have you had the PS3? There was a recent software upgrade.
I have an "Audio" button on my player's remote that is used to cycle through all available formats.

I first push the "Display" button to show the current status of what's going on then use the "Audio" button to select Dolby Digital, Dolby True-HD, DTS-HD, etc.
That selects the format read by the player but it will still output any of them as PCM.

Because the PS3 cannot output the new codecs via bitstream (lossless) and only via pcm, your receiver likely wont display Dolby HD or DTS HD on its front panel, though the sound (in my experience) is still better than bitstreamed Dolby Digital 5.1 or regular DTS.