1st off..........UPGRADE to Mach 3!!!!! You have a lic. for Mach2 it will apply to Mach3, and many, many bug fixes has happened since mach2.
External out1 and Output1 is the same thing. Look in your ports and pins, under outputs, make sure that Output1, 2....etc. is Enabled, if they are then toggle the Active hi, to active low, or vice versa.
Scott