OK we have a result.... it programs with no errors
I followed the notes on this site (http://www.gammon.com.au/forum/?id=11637 I breadboarded both chips and having confirmed the 328P was working, hooked up the ICP pins between both chips. Loaded his sketch that interrogated the 1284p and the serial monitor reported details as described, so that proved the 1284p was running. I then sent the command to upload the optiboot loader which again came back as successful. I continued down the page and downloaded the files from Maniacbug's site again and copied them to the hardware folder, confirming the operation to overwrite the existing files.
Removed the ICP wires and connected the RX and TX lines, with the DTR to reset via the 0.1uf capacitor. I also found and placed a 220K resistor in series with the TX line from the FTDI board (had previously tried this with the same sync errors before I re-loaded the bootloader). Loaded the BLINK sketch, selected the Mighty 1284p optiboot 16mhz board and clicked on the upload....and waited
The TX and RX leds flickered as they did before... then flickered again as data was transmitted.... I hocked up the LED to pin 19 (D13 in the mappings) and it's flashing away as I type. 
My only conclusion, and I don't mean this with any disrespect, is that the initial upload of the bootloader either failed, or in some way got corrupted ??
Anyway... I'm a happy bunny now, and can now start work on building my aquarium controller project - Thanks to all those who have commented and offered suggestions