yeah, the stitcher only really works "perfectly" with synthesised source materials, in my example octaver patch it sounds very nice i think. for real world signals like guitar it distorts quite heavily. but this is the same on oc-2 and u-boat as well. you absolutely have to filter after the stitcher if you use guitar or something. but you get a waveform that reacts to your playing, which is nice. also you get dynamics for "free"...
your approach is interesting as well, will have a play with it tomorrow. why don't you use the unfiltered guitar signal as source for the xfade? i also had a couple of ideas to improve filtering/tracking, will test those as well