James,
a lathe coolant system will work perfectly well for your spindle.
Jonathan,
have you wired up a seperate start switch for your vfd such as via a relay or switch rather than using the controls on the front of the vfd?
I was trying to get the multi function inputs to work fpr direction selection and start function. I have linked DCM to REV and wired DCM to FOR via a relay. Set PD001 to 1 for external control, PD044 to 2 or 3 for direction. The VFD wont accept the start command and also wont change direction regardless of setting 2 or 3 in PD044. I get the feeling I have missed something.

Ian