Digital tv audio to rca stereo

I have recently bought a new tv & stereo. The TV's audio output is via optical port (it also has a HDMI port with ARC - audio return channel) and the audio input to the stereo is via rca points.
I purchased a Digital to RCA AV converter and connected it up between the TV & Stereo (via optical toslink cable between tv and convertor) and it all works great. I can get the audio from my TV & DVD player through the stereo, BUT if I try to watch anything from an external hard drive (which is connected via USB to the TV) the sound coming from the stereo is just staticky, BUT I get the sound from the external HD fine through the TV.
I am confused as to why this is happening, as I thought the AV converter would have sorted out all of the TV audio output.
Can anyone advise if I can fix this problem, as I have a lot of music concerts on the HD which I really want to be able to hear through the stereo.
Is there such a thing as a cable that is HDMI one end and an Optical/Toslink on the other end? If so, if I bought this and then connected the HDMI into the ARC HDMI port on the back of the TV, and then the optical/toslink into the AV converter would that solve the problem??
Thanking you in advance for any help you can offer.