LG 42 LCD Audio help!

Hello, I have an LG42LC2D that's about three years old. The tv is working fine. I need help setting up a poor man's home theater system.

My question: Is there a way to convert the optical audio to 1/8" headphone jack? Will the tv volume control the optical audio output?

I have some Klipsh computer speakers that also include a subwolfer. They of course connect to a pc's sound card, the signal cable goes from there to a pre-amp input on the sub, which has speaker jacks for the small speakers. This system is fairly punchy when connected to a sound card.

On the back of my LG there is an optical audio out, and a set of av outs, yellow, white and red rca jacks. I converted those to a stero headphone jack and plugged the Klipch speakers to that. This hardly works at all - lots of sub volume but not much main speaker volume to speak of, and most of all, the volume control for the tv doesn't control the av out. I know these speakers get louder, just not the way I have them hooked up.

Is there a way to convert the optical audio to 1/8" headphone jack? Will the tv volume control the optical audio output?