I see this thread has had a few views, but there aren't any answers so just incase people are having the same problem il let every one know what the problem was and how I eventually fixed it...
While I had been out bashing around the car park the layshaft cog had loosened slightly and spun round moving out of line, the three set screws had made gouges in the lay shaft and jamed it's self fast. Never having removed one of these before I never realised how easy it should be to come off, mine would only just turn with pliers and a small shifting spanner, I got it back into place and took it out again the next day, it worked fine for 15 mins but then stripped the teeth on the layshaft and damaged the diff gear also.
This time after heating the cog and failing to remove it, I stripped back everything and removed the engine... Got the layshaft in a vice a shifter on the under side of the cog and hammered upwards until eventually the cog came off, the layshaft was so bad I had to hacksaw the end off it to get the rest of the assembly apart.
New parts all fitted now along with alloy engine mounts, out today for testing but there's the mother of all carboot sales in my bashing carpark... Damn it! Lol.
Anyway hope that helps anyone in the same situation.
Dk