Whole-House distribution of digial audio

I'm looking for help on the best way to run digital audio between two rooms in my house. I have the following wire available running between the two rooms.

(A) CAT5 (B) 22AWG 4-wire "mic line"

The runs about about 40 - 50' (from the basement media room to the family room). In an experiment, I wired rca jacks to the mic line and ran analog audio -- it worked, but there was significant hum on the line. Some people have suggested I have a "ground loop", or baulns to make it work, but no one seems to be able to tell me differences between running SPDIF digital audio and analog audio over runs like this.

Can anyone tell me what I need to do to make a digital audio run work over this line? Are there products that help, or can I just wire the connectors on each end?