Thanks again for your advice Richard, this is really starting to make sense. I have tried using the power bus looped and broken with no major change, but I will now follow your suggestions re the two terminators. I understand that a looped power bus can cause a kind of "mirror image" in the DCC signal. Incidentally, I am using solid copper 1.5mm sq mains lighting cable (twin & earth) for the power bus, the 16x0.2 multistrand is used for drop wires to the track. Sorry for the confusion.
If all else fails, I will replace the PSU as you suggest.
If everything worked correctly first time, there would be something wrong.