first of all ,there are many(most!) who's knowledge/experience eclipses mine,
but,
1/ what vca's are you using? Schemo is for either 215x, or 202c 0r 202XT or That's 2002 and then like. If you use dbx2001 or That's 218x series, the 1k resistor connected to CV of signalpath vca's need to be increased or decreased. i can't remember values - (SEARCH!) This might cause a negative value of ratio - cool effect sometimes, bujt liable to cause distortion!
2/ Are you running a very hot mix out of Digital interface? This comp was designed for +4dB tape machines, NOT very hot, 0 is -18dB, ie Protools 888's type levels. This would definately distort, but I would expect problem at 2:1 not 10:1 myself . . .
3/ Check the resistor values around ratio select switch. . . . most probable cause imho. Also check orientaion of associated diodes(?)
4/ get some advice from a real expert, not me!
Good Luck!
ANdyP