IMO your limit is because of the powerDVD software. for whatever reason its decided your system can only handle 6 channels of audio, and has therefore downmixed for you.
since your system cant handle DTS-HD... its probably right on your capabilities.
does your receiver even support 7.1 inputs? does it have any settings related to that? are you sure it can actually handle 7.1 uncompressed PCM? does that standard cap at 5.1?