Thank you Rufi for the prompt response.
I have good earth grounds to the DSPMC and also both the 5v and 24v external power supplies. My set up is a bit different than you drawing. I have a 7535N, 5v power from the exernal supply, for my digital i/o and standard db25 bobs for j2, j6 and j7. Everything going through the 7535N is working properly. The encoder inputs in j6 and j7 seem to be working properly, I can see the movement in Mach and it does appear to be correct distances.
The message bar in Mach says "estop button pressed", the physical button clearly is not and the input led agrees.