I believe we are dealing with the same problem. Please see my topic "Forcing S/PDIF Out".
The DTS wav files on your hard drive are probably sampled at 44,100 hz which is the CD sample frequency. When your sound card is dealing with a physical DVD, it is reading 48000hz sample rate whether it is dts or ac3. Most dts files around (alt.binaries.sounds.dts) are already downconverted to 44100.
Why this causes VLC to make stereo out of them I do not know, but it happens to me with my Onkyo USB-to-Toslink device. Your AC97 is also on USB, right?
Your card evidently isn't trying to play the dts at 48000 as my onboard card does. That produces either silence or white-noise, not stereo. I believe you are one step closer to a solution than I.
There's a good chance that JRiver Media Jukebox will play the dts files from your hard drive through the AC97.
http://www.musicex.com/mediajukebox
If that works for you, it will only remain to figure out how to do it with VLC, so one player and one soundcard will do everything.
I'll follow this thread...
donEsteban