My current sound card is Sound Blaster Audigy RX 5 so I think it’s possible to do
So… With all this I have to ask… Do you own Nuendo yet or is this just a planning phase kind of thing? Because if you don’t, may I suggest the $1000 you’d spend on Nuendo would much better be spent on getting a better sound setup for what you want, rather than a high-end DAW. Cubase Pro will get you surround support for half (less right now) the price and despite my love for Cubase/Nuendo I’d suggest instead getting Reaper for cheap or Cakewalk for free and spending the money on a sound upgrade. Both can do surround sounds, though Cakewalk is limited in some ways.
If you are set on sticking with a home theater setup, I would get a new receiver with HDMI input. That will get you real 7.1 discrete channels and do a way better job. They can be had pretty cheap, the Onkyo TX-SR494 is a basic 7 channel receiver for like $450 new retail.
If you insist on sticking with your current one you are probably better off with a new sound card that supports DTS Connect or Dolby Digital Live, which can encode a 5.1 channel DTS/DD signal over S/PDIF. The SoundBlaster X4 and AE-5 Plus both can do that.
You just aren’t going to get good results with trying to do matrixed sound.
Personally if you are budget constrained I’d think about just monitoring on headphones. You can get some pretty good virtualization software. Waves Nx Abbey Road plus their head tracker is like $130 and it does a rather convincing job of giving you 7.1 via headphones.
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Yes, it is theoretically possible.
According to this statement, the money has already been invested in Nuendo:
I don’t want to judge how useful it is in combination with the existing hardware. But there comes a time when you have to decide what you want to spend your money on.
Personally, I would also recommend using headphones. It’s just a question of what you want to do. And for what audience. Personally, I would be very reluctant to rely on headphones alone for surround mixes (=>5.1). I would strongly recommend investing in an audio interface or sound card. If the Technics receiver actually has a separate 6-channel input, then I would put the money into the new interface or sound card first.
And if there is no money left for such things, then I would have a look at the settings in the SurCode plug-in to see if I can improve anything.