In 4 cable Method (4CM) configuration, you wouldn't normally want to use any amp modelling as you are using the amp's real pre-amp and also its real power amp section plus its real speaker cabinet. So normally you'd simply switch off amp modelling by selecting NO AMP on a per preset basis.
Your 4CM configuration would normally be something like this:
HD500 'virtual' signal chain:
Wah > Screamer > EQ > FX Loop > NO AMP/Cab > Delay > Chorus > Reverb (for example)
Physical signal chain:
Guitar > HD500 Guitar Input
HD500 FX Send > Guitar Amp front input
Gutar Amp serial FX loop Send > HD500 L/Mono FX Return
HD500 1/4" Out (just use one and it doesn't matter which one) > Guitar Amp serial FX loop Return
Slider switch positions on the POD HD500:
Rear LINE/STOMP - set to STOMP in 4CM
Top face, left of expression pedal:
GUITAR IN, PAD/NORMAL: set to NORMAL unless you have extremely hot pickups in your guitar
XLR: GROUND/LIFT: only affects XLR outputs, set to GROUND first and if when using XLR outs you encounter ground-loop hum switch to LIFT as necessary
1/4" OUT LINE/AMP; set to LINE in 4CM as a LINE level signal is required to give sufficient level to the power amp stage of your amp
HD500 Output Mode: set this according to whatever amplification system you are driving:
PA, Powered Cabs, nearfield monitors or other FRFR - set to STUDIO/DIRECT
Combo Front input: COMBO FRONT
Combo Power Amp (or serial FX Return): COMBO PWR AMP
Amp head and 4x12 Front input: STACK FRONT
Amp head and 4x12 Power Amp (or serial FX Return); STACK PWR AMP
In 4CM - set your amp's pre-amp and tone stack settings as normal; set your MASTER VOLUME settings initially on the quieter side of normal to avoid getting your head knocked off by a potential sudden burst of feedback; set the HD500's MASTER control at about 10 o'clock to start with and turn it up in conjuction with turning up the amp's master volume until you have a suitably loud signal coming through the amp's speakers.
The HD500 FX loop should be OK at its default settings, ie: SEND = 100%, RETURN = 0.00% (this gives a normal return level - only turn it up if there is a noticeable difference in overall level from the amp without the HD500 in its loop and when the HD500 is present in the amp's loop; MIX = 100%
Set up correctly, you should not experience abnormal feedback. Your amp MUST have a serial FX loop or a parallel loop that can be made into a serial loop with an on-board mix control that's set to 100% wet.
In 4CM you would normally place any 'gainy' type FX before the HD500's FX loop so that these would feed the pre-amp section of your amp, and then any 'clean' type FX (reverb/delay/modulation etc...) after the HD500's FX loop so that they are positioned in between your amp's pre-amp and its power amp.
In practical everyday use, with a modeller like the POD HD500 although I can see why some users might desperately need to use the sound of their own host amp at times as well as the sounds of other amps as modelled by the HD500, it is rarely necessary for me personally to bother with 4CM as I can get all the sounds I actually need from the HD500 to my amp in 2CM from cleans, to blues, to country, to classic rock, heavy rock and metal. Yes - it does seem like a bit of a waste sometimes to have a perfectly fantastic Marshall JVM head that's only being used for its power amp section, but the HD500 with a Marshall PRE model feeding the Marshall power amp and Marshall 4x12 cab sounds.... well just like a Marshall should sound LOL, plus I have the advantage of then being able to swap to a Fender PRE model to get very close to the sound of a Fender Twin from the Marshall head and cab. When I use the DT50 with L6-Link the HD500 IS the DT50's pre amp and that is the best partner for the HD500 I've experienced and it does sound like a proper Marshall or a proper Fender Twin or whatever in my opinion. I mainly use the HD500 and DT50 but sometimes I may decide to use a different amp as I have several at hand.