What might be the cause of noise in my audio out on Stereo when connecting computer as the "audio in"?
Stereo is transformer isolated from AC with a 2 prong plug, while PC is isolated from AC but then chassis is grounded via 3 prong plug. Audio is unbalanced and possibly carrying high common mode noise from PSU.  The ground on the stereo is any chassis screw on the lid, which may help for stray RF but not common-mode conducted hum.  1) connect ground wire from stereo chassis to PC chassis, wrapped around audio cable. 2) conect high permeability CM choke around audio cable.  ( Use a clamshell CM choke like those molded on VGA cable.  One of these methods might work. Also reversing plug on stereo helps on leaky transformers. ( ac capacitance)