Well, crashing is never correct behavior. So please file a formal bug.
To submit a bug report, go to http://troikatronix.com/support/isadora/ and choose "Bug Report" from the topic menu/dropdown. When you submit a bug report, it ensures that the problem will get fixed.
In any case here is the issue: Isadora is a bit like a "façade" for the Core Audio system. The arrangement of the actors tells Core Audio how to hook up its connections -- what is called a "graph" in Core Audio language.
The reason you're getting the error is that, for each "graph" there can be one and only one output. So, when you add the Default Output Unit, that defines one graph. Then you add the Audio Device Output and that defines a second graph. These two systems are totally distinct inside of Core Audio -- and you can't pass data from one to the other. That is simply the way Core Audio works.
What you _can_ do is to create an "Aggregate Device" in the Apple's Audio Midi Setup app.
1) Open Audio Midi Setup
2) Click on the "+" button at the bottom left of the Window
3) Check the "Use" checkbox for "Built-in Audio Device" and "Soundflower (2ch)" checkboxes in the pane at the right.
Now, you have a new output called "Aggregate Device" that has four inputs: the first two go to the Built In Output, the second two go to Soundflower.
The next trick is to find a way to route two separate stereo (2 channel) audio feeds to the four--channel input device. To do this requires the AUMatrix mixer, which can be a bit of a beast because it ends up with a lot of inputs very quickly.
To make your life easier, I've made a patch that does the job for you, which is attached to this post. Whatever you feed to the first audio input of the AUMatrix Mixer will go to the default output. Whatever you feed to the second audio input will go to Sound Flower.
You can build up your patch from there, but the "end of the line" will be the two inputs of the AUMatrix Mixer.
Best Wishes,
Mark
d15a4c-audio-split-to-aggregate-output.izz