If you use the lm317 in voltage regulation, the current may wander. Not the best idea. Also putting a DMM in between the driver and LD can lead to blown LD's.
Use a 1R resistor in series between the driver and LD (solder connections) then use the DMM measuring across the 1ohm res. The value in mV is equal to mA of current.
If your driver is not set up to protect from overshoot, test the current with a dummy load first. Otherwise you will end up with more dead LD's.
IIRC the max current you want to run a PS3 diode is 30mA or under. Anything higher will just cut into its life. If you want more than a 15-20mW laser, move up to a PHR-803T sled diode.