If what Dark_Orbit said does not work try doing a master reset by ressing and holding the dvr/vcr button and stand by button simultaneously. This would erase all your assignments so you would need to reassign all your sources hooked up to your onkyo.

I had the same problem. I finally sent the unit back to Onkyo for repair. They said that the control board was replaced and the firmware was updated. This was about a year ago and the problem has not returned.

Check your setup:
*press setup
*go to Miscellaneous
*go to volume setup
*go to muting level
*make sure that the muting level is on minimum (press the left arrow or the left preset button)
*if it shows a negative infinite sign (its measured in decibels) its ok.
you can now mute it without the loud noise.