type alsamixer and look for your IEC958 .. there could be more than one, this is the SPDIF passthru device, and it is often muted, which will cause problems like this... you should be able just to hit 'm' to unmute it, if this is the problem. Then exit alsamixer, and test again.
Failing that, paste your /etc/asound.conf file here, so we can check if the SPDIF is setup correctly.