On CW arc lamp pumped Yags, you don't rapidly modulate the lamp, it will kill it. If you modulate the AO, you'll have possible issues with the beam changing with thermal lensing. This cavity appears to be set up for a precision beam quality. So if you like a precise, unchanging beam, you dump it some place rather then cooling down the cavity every time you want to modulate. You need the beam dump for tuning, anyways.
The power meter is that sensor looking off the leakage from the rear mirror. You tune the laser for best beam quality using a piece of burn film in single shot mode with the Q-switch. You adjust for best centering in the rod using burn film. Then you peak for power using the sensor. This is done repetitively until you meet specs. While doing this, you need to dump the beam some where for safety.
The beam has to land some where, at these powers it will cause lots of issues, especially when Qswitched. Just doing things like inserting a diverging lens with the curve towards the laser may induce air breakdown.
What is the design rep rate and pulse length? That determines much about how this will behave. Don't assume it is a CW or High Rep Rate laser just yet. On a YAG, very small changes in cavity optics can result in large changes in operational parameters.
Its not listed here:
http://www.jklasers.com/images/pdfs/spectron_sl.pdf
Have you contacted GSI-Spectron with a serial number and asked for a manual and specs?
Steve