That the Sinhalese are Buddhist and the Tamils predominantly Hindu does contribute to the problem, but a lot of conflicts that are perceived as religious are actually ethnic (Darfur, for example, where both sides are Muslim and it's between "Arab" Nomad herders and "African" farmers, though both sides look like each other physically and hard to tell apart._
It's sort of interesting that this incredibly bloody conflict which has gone on for decades is finally getting MSM, and FR attention, now. An odd phenomenon for which I don't have a good explanation is that there are a variety of rather bloody conflicts around the world where there is no real Muslim involvement (In Sri Lanka, there are Muslims, but their main activity seems to be keeping their heads down and being attacked for no particular reason from time to time by the Tamil Tigers) and they tend NOT to get media attention - the Congo is another good example of this. People seem to have a hard time mentally processing that, and also that the Tamil Tigers really pioneered and perfected the individual suicide belt bomber and they're not Muslim.