Thesauce - you state you are running MCE. Are you untilizing that interface to access your music, or are you running Foobar or similar player that supports ASIO? What version of ASIO are you using? Soundcard drivers up to date?
Also, take a look at this thread specifically the comments made concerning S/PDIF connections.
Also, take a look at this thread specifically the comments made concerning S/PDIF connections.