Hi Ray, I uninstalled and reinstalled Design Extender, set up a test site and added PowerCMS, copied the new ckeditor folder over to the site where I was having problems and it's fixed the issue with being able to close the dialog box.
HOWEVER... I realised I had the same issue on a few PowerCMS installations so decided to fix them all, but on the next site, although the dialog box problem is fixed, the editor buttons look like the screengrab attached - what could be causing this?