Extreme Fiber Coupled Laser Diode Power Loss Causes
What could cause a laser source with fiber coupled laser diodes to have extreme loss of power? 


I would suggest the designer was not aware of the critical thermal characteristics in the datasheet.

Hint Do not exceed 50'C junction temp where efficacy takes a "nose-dive" 

As a reference I have another 60mW 658nm Laser diode in a TO-18 can

From this I extracted the thermal characteristics and replotted so you can understand them easier.  Keep in mind when they spec the performance at 25'C this always uses an infinite heatsink for any semiconductor, which would be the same as a pulse test with no thermal rise.

It is a lesson for you to learn to read datasheets and understand them perfectly before designing or testing.