When you press "#" to get the Telco dial tone your OBi110 Phone Port is directly connected to the OBi110 Line Port, so not many OBi settings are involved. The volume going out to line can be adjusted by Line Port settings ChannelTxGain. ACImpedance could also be involved.
If calls are dropping out during dialling, then it could be a tone problem or maybe the OBi is falsely detecting a PSTN disconnection condition and ending the call.
Sorry I'm not being more specific, but there are a lot of variables with these physical line problems.
I'm signing off for now - getting late in my time zone, but I'll be back tomorrow so post details of what you try and what happens. For now I would concentrate on getting the PSTN line to work after you dial "#" to get the telco dial tone. Once that is working, it should be easy to get normal dialling set up.