My experience with the microverb (very similar unit) is that you want to keep the input control down low so the light is yellow/green (never red) and use the output control however you like. Yes, a Mutron/Qtron will spike it, so if that is the issue you might want to add a compressor limiter to the chain just after the envelope filter.
My opinion is that you have it properly placed in the chain if you are using the cabinetulator out, it should NOT be placed in front of the H&K.
I really don't think getting a different reverb is the answer here, although you will like the Lexicon better so I don't want to dissuade you from that.
Good luck with the repairs.