Usually, this is caused by overboosting. 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 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.