so if I copied this URL into another browser instance and then added localhost/mywebsitefolder/webassist/ckeditor/ ..then the rest of the above URL then it works... so I wonder why its using the wrong URL and not my project one....
Does your configuration parameters look something like this?
config.filebrowserBrowseUrl = '/mywebsitefolder/webassist/ckeditor/plugins/kcfinder/browse.php?type=file';
Also, this plugin uses site root relative links automatically unless you put http... in the url. You may need to change uploadUrl to include your folder name:
'uploadURL' => "/mywebsitefolder/kcfinder",
See if that works. If not, try it without the leading forward slash also.