Glad to hear you're making progress. Just speaker wire connection is fine. Don't know why the problem with the LFE split to the three units, but since all is good without the extra sub it really doesn't matter.

I can only guess that the X-Box has speaker settings that must be wrong - go into the X-Box speaker configuration menu and do the same setup as you did for the receiver speaker settings (large fronts, no sub, small surround and center) and see if that gets you there. If you can't there, I'd suggest calling your dealer for support.

Have fun!