Okay I got a 60 inch flat screen and a Blue ray and surround sound...

Your tv has nothing to do with surround sound. all it does is display video and probably has a 2.0 speaker system in it. witch is stereo. so go out an buy a 5.1 or 7.1 surround sound system.

you have a 7.1 surround system but is it a HTIB or is it a receiver with 6 speakers and a subwoofer?

If you have a good receiver look at the back it should have more than one hdmi input and one hdmi output,if this is the case plug the blu ray into the receiver using hdmi the input for the Video(cable) using hdmi into the receiver then from the hdmi out use hdmi cable out to the TV input.

If this is not possible then you have a htib and are stuck with the way its set up.