QUOTE(SphtKr76 @ Jun 28 2008, 05:17 PM)

Its something to do with the HDMI handshake happening between your TV and the console. Some TV's will tell the 360 to allow PC type resolutions and some will only allow the typical NTSC resolutions. For example, on my Vizio LCD the 360 only allows me to select standard resolutions, but on my Olevia it shows me the PC type, although I get audio through the HDMI cable on both sets no matter what the resolution settings are.
Have you tried calling MS to see if they can help?
I had the same issue the first time I turned on my new replacement xbox and I have solved it. Yes it is the "handshake" in a manner of speaking. If you go into the Display settings there is an option called "Display Discovery" which is apparently turned on by default. If you're running through a AVR, Surround Sound, a HDMI switch, or if your TV is just goofy, this discovery will not be able to complete the handshake with The TV as it does not have that direct connection. For whatever reason, Microsoft decided in this scenario that the best thing to do is default to DVI mode...WRONG. Anyway, just turn this feature off, it will tell you it needs to restart, do the restart, and you should hear the warm, comforting "vwoing" sound we are all so used to hearing, and it should default to 1080p. You may have to turn your Audio settings back to Dolby Digital after this change. I think I did.