I'm half regretting waking up this thread, especially as some find it hard to be civil.
The fact is that I have not yet seen someone who has owned an underhung arm say anything bad about them. Those who do own one, seem to be unanimous in their praise. Perhaps that is what we should expect, human nature being what it is.
As a hypothesis, it is not inconceivable that anti-skate (which is, at best, only set correctly for one groove on an entire LP) is a greater cause of distortion than tracking error. It should be easy to tell with an experiment. My hesitation comes down to the observation that the arm I would use has its bearings aligned with an offset headshell and cartridge. It will not stop the arm moving as it needs to, but it might increase friction. All tonearms permit horizontal movement as they track, and vertical motion is allowed to cope with warps in the record. My experiment would mean that a warp cause movement in both sets of bearings, thus increasing friction and and momentarily changing the VTF applied to the record. Not desirable as a permanent way of using the arm, but would the putative improvement from the underhang outweigh this factor? If I don't know that, I can't draw any useful conclusion from a negative result, and I don't want to muddy the waters with a poorly designed experiment.