Dear Yagami,
The second question is spot on. Yes, the signal from the HDMI is encoded, so we decided to put a decoder before feeding the signal to the Sigma DSP. Since it's too costly to have the sigma DSP than a decoder, we decided to replace the sigma with a decoder.
Thanks a lot for the detailed and informative reply Yagami! It helps a lot!
More power to!
Regards,
Dan