Why is there “Externally Clocked” checked, on this picture? Try to switch this off.
In the VST Connection > Studio tab (this picture), set your main output (Built-in Audio), as your Audio Device, and Built-in Audio 1 + Built-in Audio 2, as your Device Port. I’m sending screenshot of this. The reason is: this bus is used for Media Bay playback output, Import audio plaback, etc.
I don’t know the LM7 well. Is this multi-timbral? Is it possible to use channel 10 for this? Try to switch the MIDI out to the MIDI Channel 1.
I believe, your screenashots helps a lot!
