So, I (partly) figured out the problem, with the help of the good folks at ukha_d. It is *something* to do with the PC I was using for a media server. It doesnt appear to play nice with the XBMC software - I still haven't figured out why.
But swapping the drive into my desktop and sharing from there worked 100%. Even using a usb-ide adaptor and USB 1.1 from the kitchen pc with a network share worked 100%.
So the problem lies squarely with the fileserver machine. Investigation required ;)