Update, problem solved! I believe...
Setting a jumper for JD-VCC independently to the arduino 5V rail resulted in a shut down as before, a quick touch of the regulator showed it was indeed fairly warm.
By placing a 5V external power supply across the common GND and JD-VCC seems to allow the system to operate as intended, I'll be implementing the voltage regulator now to run the relay JD-VCC off the main 12V.
I'm still unsure with regards to the driver system being bypassed, I haven't implemented it yet and the system seems to be running just fine. Is it worth pursuing?