I seem to have found the solution to this - rather odd but hey who cares.
Things were resolved when I remove the "convert to JPG" option on DFP AND remove the annotation of "thumb" to thumbnails (which on closer inspection of my dbase was only saving the first one as x_thumb.jpg, then saving subsequent files as x_1.jpg)...I have my full files and thumbs in different folders (and names stored in different columns) so no probs to lose that functionality.
Lots of messages keep popping up about Helper.php having been modified outside Dreamweaver so I do hope this won't revert to the problem when I shut down and reopen - I'll let you know if it does!
Thanks guys - your support is very much appreciated.
p.s. Jason, please ignore the appendage to the old support ticket, but the support ticket itself should stay open as you mentioned that the problem it relates to (UE issue) can only be addressed once site is live...cheers