Monarch MDT-24 Retrofit (Sharp SV-2412 w/ Fanuc 0i-MC)

Well I only have the option of velocity mode and current mode for the analog and it is set to velocity mode. So unless their definition of velocity mode is different that what we expect, I don't get why the P term needs to be so high.

Its high because you are in torque (current) mode regardless of what the drive documentation says

Whether the drive is in velocity mode is easily determined: enable the drive with all PID/FF parameters=0
in this state the drive should hold position (and perhaps drift slowly) but definitely resist external force

A torque mode drive with the same settings will turn freely

It does hold position with everything zero, X just drift very slow. A very heavy Z-axis holds position as well. Unless I am doing something wrong with the tuning?

if it holds position with every P term = 0 then it is in velocity mode in which case the
primary tuning parameter is FF1.

You should be able to make the position lead the motion profile or lag the motion profile depending on
the FF1 setting even with a very small amount of P. (and you tune FF1 for best following )
If you cannot do this something is broken in the way things are connected either externally or in hal

So with a low P the f.error is not anywhere close to zero even without movement. I can only get the f.error to be zero with high P, anything above 2000!

It seems like I have got the FF1 and FF2 to do what I expect them to do. FF1 will get the f.error back to zero as soon as it starts moving and FF2 seems to deal with initial and final overshoot. However it is not having much effect on the initial overshoot.

Please see attached the screenshot:
Axis 0 Scope

Ok a high P value is not unexpected since you have changed the output scale to 2000 ( if left at its default value of 10 a P value of 10 would result in the same response as p=2000 and output scale=2000 )

The huge error at the beginning suggests that you have some kind of filtering enabled in the drive ( or really major stiction or perhaps poor velocity loop tuning in the drive )