Hi BB - last night I removed the engine and the clutch body to have a good look at what was happening. I couldn't see any signs of wear on the shaft, which we expected given it is only new.
What I found though is that the drive shaft wasn't in the thrust bearing - it was just shy of it. I backed the adjustment screw for the thrust pad right back as far as it can go, and now I can get the drive shaft rough half way in to the thrust bearing.
I gave it a quick run this morning (didn't think a test run at 9pm would please the neighbors....) and it ran fine - no vibration or random engagement.
I would have thought the shaft needs to be completely inserted in to the thrust bearing, however I don't have any adjustment left in the thrust pad screw. Any guidance is appreciated!
Cheers