I find "not distracting users" is a pretty weak excuse for removing parts of the fundamental structure of a page/site.
If people indeed do get "distracted" at the login form, it only means that the interface is not guiding them properly. E.g. wrong sizes, colors, placement, not making clear what the expected/proper action is. You have two choices, really:
- Design a clearer, more inviting, more guiding login page
- Force people to curse under their breath and login, hoping to get their navigation back.
If people click away from the login page because they think "Darn, I should also check that other menu before I get in", then you shouldn't name this "a distraction". It simply means your visitors were not yet ready to engage with your site on a more personal level -- which is what a login form does.
I hope it's now clear which choice I recommend :) As to using a modal, if you do it that way, make sure to give people an obvious way to cancel the login/close the modal.