It's not really all about the line level vs instrument level with the SLO. Yes, that's part of it. But plenty of pedals work with both nowadays. The real problem is where the loop is in the circuit. No matter what, it will never sound right with time-based effects. Period. You can get it to sound ok. But never great. The ONLY way you're going to make it work well is if you run a Wet/Dry setup using the line out. That way, your time-based effects will be AFTER all the distortion and clipping.
People have had their SLOs modified with a loop bypass switch and the amp doesn't really sound all that different without the loop. And in many cases, people who had the mod done actually like it more without the loop in the circuit.
tl;dr = Wet/Dry, fuck the loop.