Thought I should update my thread in case anyone else may learn from it also. Have done another dozen or so dives with this set up and getting better results all the time. Got the sync right, M1 on the strobe for my camera (no pre-flash) is correct and the fibre optic is very consistent.
Seems that for Macro work, ie, less than 18" from the subject, the TTL setting on the strobe exposes fairly reliably, just leave the power setting to full. For any greater distnace, M1 syncs correctly and manually dialling in the strobe intensity. After a bunch of test shots you start to get the hang of where to start with the manual control for intensity and then review the shot and adjust and re-shoot as required.
The Lumix has a downside in that there is no manual adjustment on shutter speed or apature. Bit of a bummer as in low light it tends to release the shutter for 1/30" which is way to slow for anything that is moving much. I can see a camera upgrade happening soon (maybe the Sea & Sea DX2, Cannon G10 or all the way into an SLR).
In any case, getting reasonable results even though the TTL is really not working for anything but macro. I'm guessing here, but assuming that anything more than a macro shot causes the internal flash to give its maximum output for maximum time given its only a little flash so the strobe just mimics that and goes all out, except that the 110 is no "little flash" so it just booms away on TTL and floods the subject (and anything suspended in the water column for the next 50m) with light giving huge backscatter and overexposure.
Looking forward to more fun and great shots
Pete