For the others affected by this, I installed 270.26 and added the following to /etc/rc.local (had to modify freaksworth's command a little):
aplay -D hw:0,3 -c 2 -f dat /dev/zero &
The video now displays correctly and the command appears to use minimal resources.
Not sure if/how this works for those who need hdmi audio but it is a workaround for my spdif configuration...until nvidia implements a fix?
Thanks to all who helped!