First a question back: Are you really using a second IR LED to detect the IR light? Does that work? I only know the schematics with a IR detector (photo transistor) but would be interested to get the details how to do that with an LED. Do you have a link to more information?
As detector: IR LED SFH203FA (http://ronja.twibright.com/datasheets/pin/sfh203.pdf)
As emitter: IR LED SFH415-U (Siemens 486551, DS datasheet pdf)
The whole thing works good (see the image in my first post for the assembly). If nothing stands between the IR LEDs, 0-value. If a drop of water fall through them, more or less 20-value, and so on depending of the type of the object passing through them (0 to 1023-value).
Now with the 120k resistor instead of the 100k, the 0-signal is good.
To be able to use the signal on a digital input you have to amplify it before feeding it into the Arduino.
For my project all the digital pins are used. Moreover, I may use the different ranges of value to detect what kind of liquid is passing through the IR bridge... So I keep on using the analog input pin for this sensor.