Hey Geiri,
Ok, I think (MAYBE?) I've got this sorted. Sorry the diagram is a bit messy. But from what I'm reading, you are basically inserting an effect into your signal chain OR inserting it into a loop.
From Loop ---> EFFECT ----> To loop
IN ------------------> OUT
or
From Loop -------------------> To loop
IN ----> EFFECT----> OUT
so I had to do a true-bypass style crossover on the switch to keep the non-effected chain connected. I'm sure i have some error here, so double check me! I figure you've got to have a 4PDT to insert an LED... looks like T1M only has one, but I'd add a second so it was easy to remember what the LED means...
T