I use my WDTV Live + almost exclusively for watching DVD movies. Here’s a few tips, which may seem pretty basic to some, to help isolate audio issues.
Get a DVD movie that has the THX setup utility. This will allow you to send descrete sounds to each channel to figure out what works and what doesn’t. Much easier than playing a movie and trying to figure out what you think you hear. Many of the earlier Pixar films have the THX utility, usually found in the DVD Setup menu.
Don’t assume that a movie is actually outputting 5.1 sound, even if your THX tests are. Many movies default to 5.1 if you just hit PLAY, but there are quite a few that default to 2.0 sound. On every movie I play, I go into the Setup menu and ensure that 5.1 (or best audio) is selected.
If it doesn’t do what you expect with the WDTV firmware loaded, try an earlier firmware. I am staying with 1.03.49. Later firmware just doesn’t seem to have the audio clarity and definition that an earlier version has (totally subjective at this point). I don’t need or want all the new bells and whistles the newer firmware offers, so I’m quite happy.
Again, very basic setup tips, but maybe it will help a few out there.