FLAC over DLNA/UPnP has no audio

I am also having problems with FLAC over DLNA, but in my case it doesn’t play at all and instead gives me an “Unable to play selected file” error.  I am using the JRiver MC server with no conversion and it seems to be a known issue with the SMP not handling FLAC properly over DLNA.  In your case it sounds like XBMC may be converting the files to something other than FLAC since playback is initiated successfully so you might want to check that.