Sorry to see that you're going encrypted. Just in case you come across another simulcast system in your area, this might help. I deal with distortion on my 1040 as well. I too have been wanting that SDS100/200 so bad but the price is always out of reach for me. Last month, I decided to try out the SDR route (RTL-SDR v4). The kit was around $45 on Amazon. I wanted to see how my simulcast system would work with them so I ordered another one (needed 2 to cover all the freqs). I have been listening since this morning using SDRTrunk and Trunking Recorder. I have yet to hear ANY distortion. However, I only have 6 aliases open. Not sure if that matters. I'll also add that the 1040 is missing some transmissions that the SDR picks up. Anyways, for under $100, works for me. It could be a fluke or anomoly. I'm sure someone might know. I just wanted to toss that option in the mix for you.
Oh, SDRs are a fantastic alternative way to listening and much cheaper than a SDS200. I would love to own one too but yeah, that price is out of my range. SDRs can do much of what the SDS200 can do, they just require a little setup and tweaking. They also require one to keep their PC on 24/7 if you expect ot listen 24/7 like I do. That may break some folks with the increasing costs of electric.
I owned the Whistler 1065. There's no simulcast in my area but let me tell you, that 1065 is garbage compared to an SDR at picking up P25 Phase 1. It dropped so many calls, and many other calls were just quiet. Never have any issues with receiving calls on the SDR, other than the occasional choppy audio that I can attribute to local p25 issues, weather. Not the SDR itself.
Note that depending on the bandwidth differentials, you may need more than 1 SDR for certain software like SDRTrunk. OP25 on Linux or, DSD+ Fast Lane ($25 bucks) on Windows can work with 1 SDR regardless of bandwidth, working like a traditional scanner.