Yes I know and have tried it - on my DSL the efx loop sounds so good I can cry, but I prefer the Vintage Modern amp's sound and unfortunately the design of the VM is such that it causes distortion in the effects loop. I tried numerous settings with the HX effects, a boss gt100, even an old tonelab, all had the same problems. I looked online and i found numerous users saying the effects loop distorts heavy reverb and delays because of the post phase master. It's maddening - such a great amp and the effects loop is lacking!
Using the bad cat gives me a few things which are very useful - VERY clean post effects (finally!), an attenuator so I can crank up the master (very good to do with this particular amp for dynamics/using the guitar as a controller) and finally, a clean boost from the bad cat's two channels which i can incorporate with the HX effects EQ for solos, etc.
I know it's a ridiculous workaround for the amp, but I think I'm close to solving the issues.....