I’m going to answer your question in 2 parts. The first part addresses the functionality of the “External FX Loop.” The second part attempts to address your “Wet / Dry Mixer” questions.
The following description of the “External FX Loop” is copied from MIDIWizard’s on-line help:
How the FX Loop Return signals combine with the guitar input signal are as follows:
Bypass – the FX Loop Returns are off and completely ignored. From the factory, every program in the GSP-2101 has the FX Loop set to Bypass.
Summed – the FX Loop Returns are summed together with the guitar input signal using a 50:50 ratio. Use this setting if you are using a second effects processor to augment the GSP-2101. In this situation, you would connect the FX Send from the GSP-2101 to the input of the second processor and then connect the output(s) of the second processor to the FX Loop Return(s) of the GSP-2101.
No Sum – if plugs are connected to the FX Loop Return jacks, they are the primary signal source and any guitar input is completely ignored. If there is no signal present at these jacks, you don’t hear anything from the GSP-2101. When the jacks aren’t used, No Sum behaves the same as Bypass.
Use the No Sum setting if you have a second effects processor and you want to bypass the analog section of the GSP-2101 (the Compressor, Distortion, Analog EQ, and Master Volume). In this situation, you would connect your guitar to the input of the second processor and connect the output(s) of the second processor to the FX Loop Returns of the GSP-2101.