So got a new lambda, went to fit it and I think I may have found the issue... the NGK/NTK one I got has a cable that is too short, so I need to return it to get the BOSCH one which is the correct length.
I think the previous owner had the same problem, but instead of getting the correct one, he did this instead:

Also the connector up at the engine side of things has cable 1 extended to the pin, so I think he started cutting up at the connector then decided that was a stupid idea and moved further down. Where that cable has been reconnected the waterproof seal has been removed, and after going though the puddle that caused all my problems, I think water got in the connector and shorted the damn thing out.
Needless to say im going to buy the BOSCH, get the exhaust parts and get to work. Fingers crossed!