Hi,
Hope this helps: I run a pod xt live through my recto's fx loop at these settings...
Recto
Send: 9:00
Mix: 8:00 (barely above min)...this is really the only way i've found to avoid the volume drop...anything higher than ...say 9:00 on this dial and there will be a noticable decrease in volume when you switch on the fx loop. Note: This only happens with my pod...with boss pedals, you can have this to whatever you want... *shrug*
Pod
Amps: bypassed
Output mode: Stack pwr amp
Channel volume: Noon (or whatever keeps the channel from clipping)
Output volume: 10:00 - 11:00 (will vary to taste...basicly, loud enough to hear the effects when engaged but not so loud that you start getting feedback.)
Mix level for effects - Max.
I get that wierd flange sound as well, but it only happens when I have the fx loop active without having any effects active. I just leave them on all the time and turn the loop on / off with the recto footswitch.