"AV" processor with outh the "V" ?

as the typical 2 channel fanatic, I have many many channels of amplification...most of it idle. I am not nuts about HT, but my Audiogon B&K AVP2030 died (major POP sound every few minutes....) had a really nice 2ch DAC...

I guess I am looking for a SSP (surround sound processor) My plan is simple- send the Optical from my modern TV (which gets all signal via the HDMI) to a the SSP and take 5.1 (or 7.1) to a stack of amps (or maybe one 5Ch and my mains) and a powered sub...

any suggestions? there is lots of great value out there, but it is all older model AVP.... I would like to stay below $500 since HT is low priority. that's a bit of a lie, I love my center channel (compared to the sound from the TV!)
sony ta-e9000es are selling in that price range & sounds good.Doesn't decode newer audio codecs. May have some anomilies in sub set-up(?), I felt that even with all speakers set to "large" if you told "set-up" you had a sub it sucked some bass out of remaining channels...
First, although your TV connects with HDMI, it is unlikely that it will get any multichannel signals unless it has its own multichannel amp/speakers built in. The EDID handshake between the TV and the sources will tell the sources to send only stereo.

Second, regardless of what the TV is getting, it will probably output only plain old DD in stereo.

Third, I do not know of any modern (HDMI in/out, HD codecs, etc.) standalone processor in that price range. However, you can buy an AVR with preamp outputs for this purpose and ignore the amps. Remember to connect the sources to this AVR and not directly to the TV in order to assure getting the HD codecs in multichannel.

Here's what I do. Audio is sent to SSR by optical cable (meridian 568.2). Video is sent to TV by Component Cable. You can get a several older SSR's near that price range. Or you can by a cheap Denon AVR and go that route.

As Kal stated above you will need to split the Video & Audio prior to the TV.