The log you sent along seems to be for a different, failed run of the Director client where it couldn't find the configuration file you specified ("./demok16.aws.simple.conf"). There should have been a log generated for the successful run that bootstrapped the cluster you were talking about. It's possible that it was overwritten by a later run, or maybe you installed the client locally via tarball (if so, it's in a logs directory under where you decompressed it)?
The instance type m1.xlarge does come with 4 instance store (ephemeral) volumes of 420 GB each, so what you're seeing is normal for that instance type. Director preserves those volumes and doesn't currently provide a way to resize them. (Also, Director should be naming the devices /dev/sdb through /dev/sde, unless you've configured custom configuration values for lp.ec2.ephemeral.deviceNamePrefix and lp.ec2.ephemeral.rangeStart - the log would show some more information about that.)
If you don't need as much ephemeral storage, then you can try a different instance type - m1.xlarge is an older type and not recommended by AWS anyway.