I am having almost the same issues like you have with my Snow using Ableton Live 5.0 (for info, on OS 2.7.5 everything worked fine in Ableton)
Everything installed fine with OS3...but as soon as i startup VC in Ableton the sound is distorted and phases in and out.
I sometimes get it back to normal when i tweak all FX off...but this solution lasts only for a couple of minutes and then no more sound is to be heared.
Only solution for me is to restart the Snow (power off) and Ableton.
As a standalone the Snow works perfect....but the VC plugin doesn't work anymore for me as the sound is totally broken....even after trying several settings and solutions.
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