Playstation 3 to Logitech X-540 Possible?

Hi!

First a bit of a background:

I recently acquired a Logitech X-540 and was wondering if it was possible to use my PS3 with it and get 5.1 surround?

The X-540 uses analog surround and the PS3 has the Optical out.

I bought this 5.1 Channel Audio Box with Optical in and Analog Surround out but I don't get in game sound just menu sound. I tried playing with the PS3's audio output settings and even set the Optical to Bitstream(Mix then Direct) but to no avail.

I figured the audio box I have does not have the capacity to decode the Dolby Digital 5.1 sound.

Now I am in search for a way to get 5.1 surround from my PS3 to my X-540 by using something between. Would something like this work? 5.1 Channel Digital to Analog Audio Decoder

Is there a cheaper way to do this?

Let me know your thoughts. Any help would be very much appreciated.