Hmm, I had thought that you tried a different cable. That could cause an issue like you're having.
Once you know that the system is working correctly then you'll want to perform the new update that I listed yesterday. It is only for the streaming audio sound quality and can only be applied after the first update. The link is below & see post #23. It's performed the same way as the other update.
Originally Posted by GaRAMdawg
So...I ran the update again and had the same problem but embarrassingly believe my iPod cable is bad. I switched it out tonight and will find out tomorrow if that fixes the switching issue I was having.
The quality of the Bluetooth playback, however, is still very tinny and distorted. Sounds almost like all my speakers are blown but only when playing thru Bluetooth. IPod/radio etc is good.