With a MASSIVE PE there will be a large volume of cardiac output shunted towards a region of lung not intended to oxygenate that quantity of blood. In the setting of pre-existing lung disease or pulm edema etc that large quantity of blood will not be maximally oxygenated -> Hypoxemia. Thats my interpretation of what you said.
What I am saying is that a PE, regardless of size, is an inflammatory process. Even a small PE can cause Hypoxemia. A small PE causing hypoxemia is not explained by the above description. Rather, the small PE will cause an inflammatory process that diffusely impairs hypoxic vasoconstriction throughout the lung. Hypoxic vasoconstriction is a physiologic mechanism to minimize v/q mismatch. Therefore, when this is impaired, v/q mismatch -> Hypoxemia.
I agree that in massive PEs or any circulatory collapse condition, 02 extraction goes up (obv not sepsis, CO poisoning, etc). However, in regards to the patient in the ICU/floor who is sating 90% on RA, who improves to 100% with supplemental 02, the 90% sat is not secondary to low Sv02.
I think we are on the same page here, although you are talking big PE and im taking small PE.