Just a shot in the dark: Because you reported that your AVR switches automatically back to TV/SAT. Do you have tried with CEC disabled? Default is to report KODI as active source. Maybe something is going wrong with it in your current configuration.
Sorry, forgot to reply to this, I checked the CEC, for some reason there were two CEC add-ons that could each accept different settings(which I thought was weird, kinda figure changing one, would make the same change in the other?) Anyway, disabled both, no change to the operation, LE display still freezes, but LE is running, just the display is not updating. (Also, the only time the AVR switched automatically back to TV/SAT, was when the EDID was forced to the TV, even tho the HDMI was plugged in to the AVR.
Some further info, I installed Rasbian(64), then installed KODI as a package from within Rasbian. I get 2 options on the Menu kodi.desktop, and kodi-fs.desktop(fullscreen?). If I run kodi.desktop, all seems to run OK, even connected through the AVR. If however, I run kodi-fs.desktop, I get the same frozen display, but Kodi still running in the background, that I get when I am running LE as the OS. Does that point any fingers at what the issue might be?