ScrollLock light on keyboard not working?

[Freddie]

when I use scrolllock as a hotkey the light on my keyboard stops working. Is there a setting to fix this?

Yes, include <PassThrough> in the hotkey definition.

The reason the light stops working is because you turned ScrollLock into a hotkey. That means you're redefining the actions that take place when ScrollLock is pressed, so it no longer performs its normal actions which include turning the LED off and on. If you want ScrollLock to continue to perform its normal actions, you have to pass the trigger event (your finger pressing ScrollLock) to the operating system with <PassThrough> so the operating system can toggle the LED.

...pause key was to be used to match state to the light.

You don't need the Pause key to match the states. You can keep the LED and HotkeyNet in sync like this:

<Hotkey ScrollLockOn ScrollLock>
   <PassThrough>
   <TurnHotkeysOff>
 
<Hotkey ScrollLockOff ScrollLock>
   <PassThrough>
   <TurnHotkeysOn>