EscCtrl: Hmm...Nothing useful there (Only input from your mouse). Looks like I'm just not capturing the direct input data from your converter at all, which is exactly what your comments would suggest. Just need to figure out why...
S.SubZero: You could just check the flip axes button, and it'd fix that.
Anyways, it's fixed in the attached file (Which I'll play with a bit more and make an official release of, unless you encounter any other problems with it).
I'm not sure why you're having issues with diagonals. I simulated them, and it looks like I'm doing everything correctly. Do the arrow keys handle diagonals properly in CvsSNK2 if you bind them to the d-pad?
To check my processing of diagonals, you could enable logging and look at the output, if you so desire. If your game supports dual shock controllers in full analog mode, you'll get lines like:
00 42 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 <-- Input request
FF 79 5A
FF FF 7F 7F 7F 7F
00 00 00 00 00 00 00 00 00 00 00 00 <-- My response
The 4 bold 00s are the d-pad. If 2 of them are non-zero, you're (I'm?) sending diagonals correctly. If you aren't in full dual shock mode, you'll get a lot fewer numbers (None of the extra 0's and possibly not the 7F's. The 79 will be 41 or 73, depending on if it's in digital or analog mode). In that case, the value where the bold F is will indicate if you're moving diagonally. If two bits of it are 0 instead of 1, you are moving diagonally (1 means up, 0 means down). A value of 6 would be up and to the left. If you don't know how binary/hex work, don't bother with it.
Probably simplest to just bind arrow keys to the d-pad and see if that works instead of playing with logging.
Edit: Oops. Forgot to attach the file.
<Attachment superseded>