I discovered what my problem was.
There appears to be a bug with the File Manipulation Wizard. On Step1 if you change the Action: to lets say Reaname existing file, then change it again to Rename new file, it retains [ExistingFileName]_[Increment], it does NOT enter [NewFileName]_[Increment].
I had noticed that but in correcting it I entered [FileName]_[Increment] instead of [NewFileName]_[Increment].
Sorry for the inconveience and thank you for your help.