Usually, this is caused by over-boosting. Remember that all EQ requires additional headroom. In the case of Dirac Live, it will boost by up to 10 dB, so if you run your SHD at 0 dB volume with a digital input (e.g. in the case where you control volume in the amplifier instead of in the SHD), then you will certainly get a clipping of the output signal. If you experience distortion, reduce the level in the SHD to less than -10, and increase the gain on the amplifier accordingly.