Hey guys - thanks for your replies.
After a bit of further investigation today, it's looking more and more like the 'box - bummer, I was hoping that it would be a driveshaft prob as that would be easier and cheaper to fix.
Robiwill - interesting to hear that the reverse cog might be a weakness in these 'boxes. Did he also mention anything about replacing the cog i.e. undo these 4 bolts and replace, or am I living in cloud-cookcoo land?

It's sounding like a trip to the local breakers might be in order, unless any good folks out there can advise on replacing the reverse cog?
As a matter of interest, anyone like to advise on the 'best' way to replace a 'box in a MK3?
Thanks guys for all advice,
Dobbs.