mjnman, if you have AV receiver or any other digital receiver/dac just connect it to SPDIF output of your Live and enjoy! In Windows S/PDIF out is working always. In pure DOS not always, it depends to card's revision and driver's version. But in DOS it is not problem too if you use my DOS mixer for EMU10k cards which I've been shown already. It can enable digital out on any Live/Audigy card with (or without) any DOS driver version.
If you have not digital receiver, if you don't want change to another Live card I can give you another advice. Take one good high quality PCI card (for musicians and audiophiles) (like EMU 0404 or so) and connect Live's digital output to E-MU's digital input. Just use it as high-quality DAC in Windows and you'll can use Creative's VxD EAX driver. In DOS take my DOS software mixer and redirect WAVE sound to REAR OUTPUT. If you don't know I'll say you about it: the rear output on Live cards has much more quality than front output. Yes and yes! It's true! Surely the Creative are idiots because they made it. But it's true.
Let me a stupid question: did you check the wire you use?