I'm confused how the 1st I2C address is even responding.

Your device address range, dependent on which address bits are tied HI, is between $40 and $4E according the data sheet.

Name: PCF8574 I2C address.JPG Views: 899 Size: 24.6 KB

Code:
01000000 = $40 ' With A2, A1, A0 all set to 0 : (bit 0 set to Write) 
01001110 = $4E ' With A2, A1, A0 all set to 1 : (bit 0 set to Write)
Verify which of your PCF8574 address select pins are pulled High and correct them on your current code because other than that it looks right.

Art, the 10ms PAUSE in the manual is referring to writing to an EEPROM that needs that Write delay because it's slow getting out of bed like me.