First - you have two calls to mc.mcSpindleSetDirection( inst, 1 ) in you code. You only need one. The second shouldn't cause any problems, but is not needed and for the sake of code clarity should be removed.
Second - *IF* you want a spindle RPM of "100" to be the maximum intensity, then you need to edit the spindle RPM range to be from 0 to 100. Go to the Mach4 "configure" menu and select "Mach...". Then click on the "Spindle" tab. In the first row, marked "0", make sure the MinRPM is zero and the MaxRPM is 100 (or whatever RPM you want to correspond to the maximum laser intensity). If your mc.mcSpindleSetCommandRPM() call sets the RPM to the maximum value, then the SRO slider should NOT be able to make it brighter. It should be able to make it dimmer.
Third - the documentation for your laser's PWM input (that I found at the link you poster earlier) says that the PWM input will control the laser intensity from 15% to 100%. That implies (to me) that the lowest power setting attainable via PWM control is 15% of max brightness. Outputting 0% PWM apparently *still* gives you 15% brightness. So you need some other control to turn the laser off.
Are you using any other signal to control the laser on/off? Or are you only using the PWM signal on Pin16?
Regarding the EStop not turning off the spindle/laser - when you say "the LED is on when estop is pressed", do you mean when you press an external EStop button (that is wired into the EStop input on the PMDX-132)? Or do you mean when you click the "Disable" button in the lower left corner of the Mach4 screen?
Finally - please generate a Mach4 profile package (go to Mach4 "Help" and select "Support" and then "Package Current Profile"). Save the file somewhere that you can find it and then either email it to me at bob at this domain, or upload it here. In order to upload the profile package, you will need to either (a) change the file extension from ".m4prof" to something like ".zip", or zip the profile package into a zip file. This will hopefully make it so I don't have to keep asking questions about your configuration.
Bob