As feared the gearbox is toast. I've decided to cut my losses and call it a day, so if anyone is in the market for a 1997 4.2 QS (pre FL) with 149K on the clock for spares or repair I'm open to offers (collection only!!). Car is in excellent condition for year bar the knackered gearbox (pics available).

Gutted at this outcome but c'est la vie.....if someone is willing to either take on a project or spend £1500 on a gearbox overhaul then they will have themselves a great car. Otherwise its up for spares/breaking.