Coded aperture snapshot spectral imager (CASSI), efficiently captures 3D spectral images by sensing 2D projections of the scene. While CASSI offers a substantial reduction in acquisition time, compared to traditional scanning optical systems, it requires a reconstruction post-processing step. Furthermore, to obtain high-quality reconstructions, an accurate propagation model is required. Notably, CASSI exhibits a variant spatio-spectral sensor response, making it difficult to acquire an accurate propagation model. To address these inherent limitations, this work proposes to learn a deep non-linear fully differentiable propagation model that can be used as a regularizer within an optimization-based reconstruction algorithm. The proposed approach trains the non-linear spatially-variant propagation model using paired compressed measurements and spectral images, by employing side information only in the calibration step. From the deep propagation model incorporation into a plug-and-play alternating direction method of multipliers framework, our proposed method outperforms traditional CASSI linear-based models. Extensive simulations and a testbed implementation validate the efficacy of the proposed methodology.