What's the alternative to "PCM" in your TV? On my Samsung it's "Auto", which sends Dolby 5.1 and that works well with the Ultra. You could try the Dolby route in case your TV has/causes trouble decoding to PCM.
The eARC option should be off, maybe that's what you meant by "ARC auto".
I remember when I got my Ultra with July firmware there were clicks and pops with this mode whenever sound formats changed in some way. Solved by enabling "Audio Settings / Fade-In & Fade-Out Effects". I've run like this since then with no issues and I don't actually notice a fade-in either.
I've never had periodic clicks & pops though, only when changing TV content, which is why I think the ongoing format conversion is more likely the culprit for yours.
