Ok, so I got around to trying with another PC. The other PC (ATI Radeon) shows exactly the same thing: 2 channel audio, but DD under encoding formats. I left the enhancements disabled, left exclusive mode enabled, and WMC works fine (DD 5.1 over HDMI).
Then I went back to the Intel NUC and did the same thing (enabling exclusive mode) -- it also works fine now. Odd. I dunno what I did to fix it (maybe it was something else I tried a few days ago PLUS re-enabling exclusive mode?), but it seems to work fine at the moment. I'm unwilling to tinker further without some research into how it is supposed to work for risk of breaking it again. I was able to find a thread that states that 2 channel is correct because all Windows sounds will be only in stereo (unless you had one of those old NVidia chips that would upconvert, but nothing like that seems to exist anymore). However, DD definitely needs to show in encoded formats. I'm also guessing that receivers cannot get both signals on the wire at the same time -- that may be what "exclusive mode" means?
I'll leave the thread open a few days in case any ideas or information is out there.
Edit: I'm marking as answered. Won't be looking into this much further, but I will keep an eye out if someone has issues and needs to know my configuration. I spent days on this and it finally works, so I don't want to break it, but I'm happy to share all my settings and driver versions if necessary.
