Have you updated the DZPD3 firmware (1.22 latest)? If not, steps here.
Not sure how critical that update is, but I don't think it can hurt.
I just recently installed one of these PD3, and I couldn't get the dimming to work smoothly using Jeff's driver here. I admittedly didn't troubleshoot too much -- since Jeff's drivers are usually rockstar options for me, I suspect it was something I screwed up in my haste or perhaps a conflict with the 1.22 f/w.
I ended up trying the stock "Generic Z-wave plus dimmer" driver and that's working well for me (i.e., smooth dimming using "Start/stop raising/lowering" commands in my Pico's Button Controller setup)
