I'm using the Aurduino-Tiny 2313 core.
Made a bit of progress... First realised it was still running at 1Mhz. Burnt the 8MHz bootloader to set the fuses and verified correct speed with the standard blink.
Went back to the SoftPWM blink and it was flickering fast now rather than random blinking. I've since discovered that setting a very long delay between the on and off provides correct functionality i.e.
From this I'm concluding that the timer the SoftPWM is now using is also the one the delay() function uses and that has now been changed such that the delay() function no longer provides a delay in ms. I can live with that and just make adjustments in my code. Are there any other side effects I should be aware of?