@dc42 Simple solution at last - had I but known of the pesky T0 tool set in config.sys. As you must know ( but I didn't ) the "T-1 P0" is inoperative if a tool selection has already been made. Re-reading the g-code Tools section doesn't seem to me to make that point.
One semi-related opinion from me is that it would be helpful in these situations if there were a line-by-line g-code step-through ( or at least an ability to set break points ). I think I might have quickly determined the problem.