Status (see updates at end)

The VSX-42 now plays the LG TV audio using the LG ARC dedicated HDMI port. The appropriate settings change was made on the VSX-42 using the remote. 

The VSX-42 remote control is going back. The tuner preset controls do not work. I'm replacing the off-brand remote with a genuine Pioneer remote made for the unit. 

I've ordered another HDMI cable, shorter, and LAN cable. Both, the TV and the receiver, have LAN connectors. The receiver accesses Pandora and internet radio using the LAN connection. The TV uses the LAN connection to access the Xumo Channels+ network of TV stations, the internet using the WebOS browser, and LG related data.

The SX-255R receiver is paired with the Cerwin Vega speakers on the other end of the room (24'x12').

There are, I think, too many options and settings in the TV. They can be useful for those who are prepared for a long learning curve. Knowledge of cinema formats and technology is a must.

Overall, both systems are done unless, or until, I decide to replace the Altec Lansing Valencia compression drivers with the reproductions, or repair the originals (using a silver ceramic conductive epoxy) and re-cone one of the woofers (a small hole-tear a couple of millimeters in size); re-foam the woofers and replace the control panels on the Cerwin Vega speakers.

The Cerwin Vega speakers are mounted on homemade stands that came with the units. This places the tweeters and midrange speakers at seated ear level.

The speaker wire for two more speakers in a Surround 5.1 system has arrived. The Polk Audio PSW10 subwoofer should arrive Monday.

Status post UPDATES:
I had to set the ARC mode to PCM to get the audio out.
I received a refund on the returned VSX-42 remote unit and have received a Pioneer remote that works.
The cables arrived. I now have a LAN connection for both, the AV receiver and the SmartTV.
The shorter HDMI cable relieves some of the mess of wiring associated with the Center.
I moved the Cerwin Vega speakers to a different location and am driving them with the Pioneer SX-255R.
At this writing, only the Altec Valencias are attached to the Home Entertainment Center.
Currently, the system is set up to bi-amp the speakers which are driven by the VSX-42.
The receiver can run standard bi-amped stereo from the tuner, or Surround 5.1 from the SmartTV.
The Digital Audio Out has been replaced by the HDMI ARC output.
There are reports of problems using the DAO in situations similar to mine.
The original Altec crossovers hve been re-puposed as four second order Linkwitz-Riley filters;
two hi-pass for the horns, and two low-pass for the woofers. The crossovers create an artificial sound,
but the use of crossovers results in less distortion and less chance of permanent damage to the compression drivers.
The sound without them is, in my opinion, more natural sounding. I am tempted to leave the crossovers out.
This becomes understandable since I paid less than twenty-five dollars for the pair (Chinese imports).