Windows 7 - Files needed to play videos are not installed

I've recently set up my win7 64 bit ultimate as my main HTPC. I have run into a rather annoying issue with the HD Audio being sent out from my sound card.

specs:
16gb g.skill ripjaws ddr3 1333
gygabyte ga-p456-es3g lga 775 mobo
intel core 2 quad q8400 2.66
evga Superclock 012-pe-1572-ar GeForce gtx 570 1280mb - driver 295.51
Hauppauge WinTV-HVR-2250 Media Center Kit Dual tuner

setup:
PC in the bedroom with hdmi routed through the wall along with 4 usb ports and one empty slots in a 6 hole keystone wall plate. HDMI cable from the Video card to the receiver - all normal windows audio works, games play, etc

Scenario:
MCE opens and audio works normally. I play a movie and it is fine, stream something from the internet it's fine, play a dvd and it's fine. Switch to LiveTV or something recorded OTA and it does one of a few things. Either it will play for about 2 seconds and then start a playback loop of the audio or it will simply not play at all and give the "Files needed to play videos are not installed" message. When this occurs and I then try to go back to play a dvd, avi, mkv, mp4, etc it will not play at all until I close MCE and reopen it. Those types of media will again play but as soon as I try to hit recorded or live TV it stops.

I found a similar thread on this but it made no mention of using the HDMI audio so the solution to that didn't work for me. I have tried disabling/re-enabling the HT-R670 in the nVidia control panel with no effect. Turned MCE functionality on/off through control panel. Reloaded older drivers, loaded the newest beta drivers, use factory drivers on the CD again (which brought back the black screen issue, but still didn't fix audio either)

The odd bit to this is if I use the built in 3.5mm stereo plug for speakers there is no issue whatsoever. I really don't want to do this, though. I do have the cables and keystones to make it work but I'd much rather not have to go this route. Does any one have any suggestions at all as to what can be done to remedy this?

Thanks for any help offered.

Kevin

(edit) Just wanted to add that I have loaded Sharks codec manager a while ago to resolve some other issues.
(edit 3) formating fix (I hope)

The nVidia WHQL release 285.62 have problems.
go HERE and find 290.36 - BETA drivers for your GPU
do not get 295.51 or 290.53 - both of these have issues of their own.

choose the 'clean install' option during driver installation.