output to HDMI cable from non-HDMI receiver?

As a slowly recovering audiophile and neophyte about video, I'm putting together a new home theater ... but want natural, musical sound. Therefore, I like the idea of used B&K instead of mass brands. However, no HDMI capability with the B&K. Questions:

1. Is it possible to run video sources into the B&K receiver, then output to a switching device that in turn outputs to HDMI cable, sending the video signal to my TV? (audio signal will come through speaker wire from receiver).
2. Will I lose any sonic quality of digital sources by using RCA's vs HDMI cable for audio?

You're doing something very similar to me, although I decided to stick my a Krell HTS7.1 due to the superior sound quality (yet no HDMI).

Basically, you have two options the way I see it:
1. Buy a video processor (such as Anchor Bay DVDO VP30, VP50 or Edge ), which allows you to output the sound via coax or optical and keep the video in HDMI.

2. Run the video directly from your source via HDMI and output the sound from the source to the B&K via optical or coax.

The benefit of the first option is not only that all switching is done in one location (ease of use), but also that you can improve your video quality.
FWIW B&K were just showing an HDMI equipped receiver and pre/pro @ CEDIA.
If all you are using is a cable-box, this will be OK but, if you are planning to use a BluRay source now or in the future, it will not be sufficient.

Without HDMI input to the receiver, you will have to send the video from the source to the display directly and connect to the processor via multiple analog audio cables as the hi-def lossless audio codecs (Dolby TrueHD and dts-HD Master Audio) cannot be transmitted by optical or coax.

This also means that (unless the receiver can re-digitize those analog signal and that may not be optimal anyway) you will have to do any necessary bass-management/balance/delay processing in the source.

HDMI outputs audio and video in digital format. If you output video and audio as an analogue signal to your receiver and then convert it to HDMI for your TV you are defeating the value of staying in the digital domain all the way through.

You may consider HDMI for video straight to your TV and analogue audio to your receiver. This keeps the signal as pure as possible and is what I do.