
Here's the business end, as I test fit it into my 3D-printed mount.
To power the spindle I'm using a Hitachi L100 running on a 110V wall outlet. Getting the L100 configured correctly was a pain. The spindle didn't come with any directions, so I spent about two hours trying to figure out if I had a software problem, or a wiring problem. In the end I had both.
In the end I had to set the Max Allowed Frequency to 360, and the Native Motor Frequency to 360 before the VFD would send the right signal. Once it did the spindle turned backwards. So it was a matter of reversing the wires. One thing to note is that this spindle does not seem to be wired for ground.

Here's the final hookup.
And the runup!
The next problem to tackle was the water cooling. For cooling I used a $60 air conditioner condensate pump. The nice thing about this choice is that condensate pumps are readily available at home improvement stores, and its a combination pump and reservoir. Mine even has a sensor that could be used to detect "low coolant." In addition, the condensate pump moves water at about 1 gallon per minute, which is fast enough, but not so fast that it would stress the plumbing connections.

Water hoses installed!
The condensate pump feeds water to the spindle, which flows out of the spindle into a salvaged PC cooling radiator. From the radiator water flows back into the body of the condensate pump.

PC Radiator: Note the sketchy barb connections.
The PC Radiator has a 12V fan which needed to be powered. I spliced the connections to a PC molex connector and attached it to an external hard-drive power supply. (The +12v goes to the fan, and the +5v goes to the laser.)
The whole system holds about a half gallon of distilled water. I'm debating whether or not to add a cap full of bleach to prevent mold growth. Before installing the cooling the spindle would get warm to the touch after a minute or so of use. Now I can't detect any noticeable warmth. The whole system is connected to my e-stop circuit, so the pump is on whenever the VFD is energized.
Lastly I set up a little turret and did some carving to test everything out!

"Boo", Carved in Corian Scrap

A test in 6061 aluminum!

My little setup!