Unfortunately, I still don't have an answer for you on this. We did some initial testing when you originally created the post, but couldn't find another way to read/set the variables that didn't introduce other problems. The method we use also works as intended with core-Joomla SEF and other routers, and we have many users with sh404SEF working as well.
I'm not sure what the specific cause of the problem on your site is, or if other users with sh404SEF simply aren't using the 404 feature (unlikely, since we're using it on this site, but with an older version of sh404SEF). I still think this is something we won't be able to fix on our end without causing other problems though, which means we won't be able to make that change if so.
Thanks,
Alex