From your description it seems that you have a thermal issue with the diode housing. What kind of cooling do you have. A M140 will get really hot when driven hard with high current. If you use only the standard 12MM copper barrel from DTR, it is to small to get rid of the extra heat produced.
Slip it into some sort of heatsink with a proper cooling fan, and i guess you are better off.
What is secure regarding distance. Don`t think threre are a correct answer regarding indirect exposure, but if it feels uncomfortable watching the focus point - don`t do it. A pair of 445 protection glasses are cheap. Better with cheap ones than none.
Espen
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More projects than time available.
More projects started than finished.
More money spent than earned.
More failure than success.
Just got to love lasers!