Some distortion in this circuit is unavoidable without a design mod. The Delegate is a clone of the EQD Warden, which is based on the DOD 280. These all have a common design deficiency: the peak detector circuit (Q1-Q3, D1 & D2) puts a non-linear load on the point in the circuit where the guitar signal passes thru. Looking at the schematic, the signal that feeds the TONE control is taken from the emitter of Q1. Q3 and D2 load the signal on Q1's emitter. D2 clips the negative excursions of the signal and if the ATTACK control is set full CCW, Q3 clips the positive excursions. A better place to tap off the signal is from IC1-1. If you have an audio probe, check it for yourself: distorted signal a1 Q1-E, clean signal at IC1-1. Ideally, there should be a resistor in series with C5, something like 1K. Why did they do it this way? I can only think of one reason: that's how the last guy did it.
If you want to make the mod, simply lift the + lead of C14 off of the board and wire C14+ to IC1-1.
One more thing: optical compressors depend on the LDR's slow response to smooth out any ripple in the LED current. With low freq content, especially bass guitar, the LDR will let some of that ripple pass thru and modulate the guitar signal, creating mostly 3rd harmonic distortion.