Two Channel -- DTS Master - HD Audio?

Have a two-channel system. Just put a hdtv in the mix. Feeding toslink from ps3 blu ray to two-channel dac. Understand this will not provide the hd audio. Questions, which I can't seem to find the answer to, is it possible to even get lossless audio from blu ray to two-channel system? Do I need a blu ray player that decodes and then use two-channel analog out to get this? Do blu ray players do this? Is something lost taking the multi-channel high rez audio down to two-channel in the since of whether it's still lossless (not benefits of two-channel v. multi-channel)? Worth the money to get the lossless, and if so, cheapest sonically sound route to go? Thanks for any information you can provide.