Does sound like you are maybe holding the heat tool too close. Versamark is very sticky stuff, but even that might let loose the powder with a very direct blast. I have a Marvy myself and it works just fine. I would estimate I hold it about 4 -6 inches away, and I usually keep it moving a bit so I don't overheat any one spot. It should be no different than using clear powder, really.
And Sue - all I can say it I'm glad I wasn't stamping back in the day, and holding my CS over a toaster!