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The AVR-E300 doesn't have an audio output. It's a very basic AV receiver built down to a price.
Even if you has a better quality receiver, you still would only be able to port sound from analogue sources (ones connected via red & white RCA/phono) to the Sonos Connect for distribution around the rest of your home. AV receivers don't decode audio from HDMI sources to analogue stereo.
If you want to port sound, hook up a source direct to the Sonos Connect's audio input. Don't try going via the receiver.
http://www.retrevo.com/support/Denon-AVR-589-Receivers-manual/id/23110dj893/t/2/ This is a site where you can download a manual. I'm not familiar with Denen however, you should be able to go out of satellite receiver(HDMI) to your receiver input(tv/sat) then to your HDMI input on tv. Your receiver might show video and sound through another port of receivers options, ie; video 1, video 2, etc. Check all putput options for your picture and sound. Hope this helps.
There is a short either on the speaker wires to the speakers or the speakers are defective (some sort of a short or too low of resistance). Lastly, check to see if a stray strand of wire is not touch the left and right terminals. Any short in the network (wire, lack of insulation, staple, screw, etc. ) will cause the system to clip.
Make sure that the volume is not muted or too low on the TV...the TV volume output to your receiver will be performing the function of a pre-amp to your receiver. Then select the appropriate input on the receiver that you have the TV audio connected to.
Long and painful answer!!! However, in the end, you need to bypass HDMI thru your receiver and go direct to the TV. Connect Digital Coaxial or Optical for audio to your receiver. Your version of HDMI in your receiver is not compatable with today's HDMI version. Yours is 1.1a and the current version is 1.3b going to 1.4. If you want detailed info as to "why", just google "HDMI 1.1 problems" you can read for hours! Sorry for the bad news! However, it is what it is. Hope this helps. If you need further help with setup, post a comment and I can give you further help.
The spkrs sound like they are bi-amp spkrs, meaning you have multiple terminals on the backs of each spkr, the jumpers on the spkrs should be connected as such. Now you just connect the spkrs according to the Denon spkr conection diagram. Do not use the surround back unless you have 6 or 7 pair of spkrs
Finally the problem was with the HDMI cable. When I pushed it in on the TV set the problem disappeared. It seems the connections must be quite firm on the HDMI cables otherwise anything may interfere to the sound.