However, I was still able to:
Bitstream regular Dolby Digital audio on Blu Ray discs using PowerDVD
Bitstream TrueHD Audio from mkv or mp4 files using PowerDVD
It turns out that I had the setting to automatically switch the refresh rate enabled. Apparently the new 3000 series cards can't use exclusive mode when running at 24 hz. Disabling this setting allows audio to bitstream again.
To disable this setting:
HKEY_CURRENT_USER\Software\Cyberlink\PowerDVD21\AskDlg
ModifyMonitorFrequency change this from 1 to 0