Here's what John did, with a bit more explanation.
This method I'm using is slightly adapted from what's explained here.
To create a shadow for the 3D-text, I guess you should create another (2nd) clone of your text behind the original text (which shows in the pic being behind the first clone) and set its wall shadow appropriately. Note that this text isn't part of the blend, but is there to create a shadow.
Not removing the bevel in your example resulted in the text's curve (above the text) becoming visible during the blend operation. Seems like a bug to me :\
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