solved: ARC sound dropout problem
ARC cabling problem: Back of LG had right angle connector to short HDMI patch cable that went to wall behind LGTV. Cable in the conduit inside the wall went to a 2nd patch panel in amp area. Short HDMI patch went to Yamaha 5810 amp and its ARC input. Total of 3 cables, 2 keystone feed-thru and one 270deg adapter. I assume all these devices somehow degraded the signal because ARC worked perfectly when I connected the TV directly to the ARC input of the amp.
I need the right angle adapter as the TV is mounted on a swing arm to give access to the movie server PC behind the TV. The HDMI & USB connectors are parallel to the TV surface which makes sense for a wall mount but puts too much strain on the HDMI when the TV is rotated on the swing arm. The HDMI#2 got damaged due to a stiff cable and not having that 270deg adapter. A better design would be cable clamps to secure the HDMI and prevent them from prying the HDMI connector off the PCB. If any LG engineers read this, please consider adding a few eyelets near the HDMI to allow cable ties to secure the cables.
Anyway ARC sound is not dropping out anymore and I am waiting for a longer HDMI cable to avoid having to use the patch panel.