I just got my OSSC 1.6 today, and I am having the same issue, with the same cable.
Is the TX mode setting set to HDMI? Yes
Is the firmware version shown on startup 0.78a? Yes
Can you make sure you have plugged the 3.5mm audio jack to the correct audio input (A1 out/A2 in)? Yes
Can you try setting the switch to the other position, just in case? Tried both positions.
Can you try another device connected to the OSSC to see if any sound comes through? Tried the headphone line out of my laptop, no change.
Can you try with another monitor/TV to see if this might be a compatibility issue with this particular TV set? Neither my TV, nor my Capture device show any audio input.
Anything else to try?