I have seen many videos trying to get this to work for me but this finally got it working for me. This fix is for PS4 users who want to hear their game audio and their party chat in their stream. (this has only been tested on Windows 10) This tutorial can be used with PS4 headphones with the Elgato Chat Link as shown below.
You may also use a USB sound mixer plugged into the PS4 with an output cable plugged into the Elgato, either way will work the same. Now install the Game Capture for Windows software on the Elgato site. Run Game Capture HD and in the to right hand corner in the device area click the cog wheel.
In the Game Capture HD60 S Settings select “Analog Audio” in the Audio Input.
Now close Game Capture HD and run OBS. Setup your PS4 in Sources and click on the cog wheel for settings on that source.
Then select “Configure Video”.
Magically a dialog box from the Elgato software will appear and be sure to check “with Analog Audio.”
That will get your audio from the game and the chat going in your stream!