Hi, apologies for the 3-year bump...
I'm having this exact issue and I don't know what to do. I have the Line 6 GX model. I set everything up as the video suggested. Cubase detects Pod Farm 2 as an insert, and the Pod Farm 2 window pops up when I select it from the list of inserts. But it doesn't detect any sound - it just records the guitar clean.
I have the ASIO GX driver selected.
Since I am totally new to everything here are some screenshots - I'm probably doing something wrong: