The problem appears to have been the rotary encoder, I sent the original back to BEC and at first they said it was too old (26 years old) for repair. Explaining that the machine was ex school and had very little use and I was only going to use it for 'hobby' stuff they agreed to renew the electronics. This they did with a very fast turnround and at a sensible price (shame about the VAT !!!!). After re installing it and the software just incase, I loaded the Denford sample program using G76 and it worked
Many thanks to BEC