Yea, my IVP is the one that came up with an insane ground loop issue. It was fixed by using the 3-2 converter plug. Also, which output are you using? I finally printed out my manual, and had been using the main output...which come to find out, is more for speaker driving and such. I read that if you use the -10db output, that is designed for use with regular guitar and bass amps. I tried it, and it is quite a difference, and much quieter, though I still use the converter plug as well.
As for EQ, you hit the nail on the head. I had a reproduction ibanez eq board made, same as Bobby had in his Cowboy. I took that, along with the pots and everything to spec, and had Gary Brawer make me a custom pedal with it. MK made a pedal along the same lines as well. Anyway, I can control Mid, Bass and Treble as well as gain. I set it directly after my guitar, but before the IVP. Ive had some great results with it!