I have the same sound card, same issue, but there's a "workaround" using 
alsamixer:
-start alsamixer from terminal (is there an easy way to get a gui?)
-just unmute the IEC958 0 track using the "m" key

I have no idea how to have this set up automatically.

Btw, the only way to get access to the sound card's equalizer is from 
alsamixer, which is absolutly not convinient.
I really hope we will get back full access to every options from a simple gui.

-- 
Karmic alpha: No audio with Creative Labs SB0400 Audigy2 card.
https://bugs.launchpad.net/bugs/400629
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