No, you are not the only one
I just experienced exactly the same although under fedora core 3.
Try downloading a kernel from kernel.org and compiling that yourself, that solved it for me.
I have tried kernel 2.6.7 and 2.6.10 (I think others work just as well) and with them I am able to play dvd's with dolby digital output to a receiver.
This is with alsa 1.0.6-5, xine-lib 1.0 and using a soundblaster live (emu10k1)