I have the Polaroid FLM-2632 and haven't had a problem with it. Last night while increasing the volume (Not totally sure, but that's the button I thought I was pushing) the signal was lost leaving me with a blue screen and a "No Signal" message.
Since then, I ruled out the cable box (Comcast), the cables, etc. and it is clearly something with the TV. Interestingly enough, I figured out that if I use Input 5 (Video5 - YPbPr2) I can get a picture, but truncated on the sides -- even in the wide screen mode for most programs and when viewing the cable guide menu. Some channels come in with the HD and widescreen fine. Some don't.
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Having browsed the user manual I wonder if you plugged in the Sony BDV T57 Home Theatre System while the Polaroid FLM-2632 tv was powered down via the optical cable .
Then powered up the Sony BDV T57 Home Theatre System first and then powered up the Polaroid FLM-2632 tv
Maybe the Polaroid FLM-2632 TV has to detect that the Sony BDV T57 Home Theatre System is connected and powered up when the Polaroid FLM-2632 powers up. To activate its digital audio out ????
The note part about only being available only under HDTV (cable/air) mode. Might be the cause of your hassle also ?
DIRECTLY FROM THE USER MANUAL
source from http://tv.manualsonline.com/manuals/mfg/polaroid/polaroid_flm_flm2632.html
" ? Connecting to Audio Receiver:
Use an audio cable to connect the audio receiver's audio LINE IN jacks to LCD TV's
AUDIO OUT jacks. ? Connecting to Digital 5.1 Sound System:
Use an optical cable to connect the audio amplifier's OPTICAL IN jacks to LCD TV's
OPTICAL OUT jacks.
Use a coaxial cable to connect the audio amplifier's COAXIAL IN jacks to LCD TV's
COAXIAL OUT jacks. Note: Above mentioned function is only available under HDTV (cable/air) mode.
? Connect all AC power sources, before turning on the power switch of the LCD TV or
other connected equipment.
? Press the button on the remote to turn on the LCD TV."
The manual for this TV can be found on this page: http://www.polaroid.com/service/userguides/ce/ce_ug.html
The specific pdf for the FLM 2632 is here: