Ok, so I was wrong in some of my initial statements: I had foolishly believed (or understood incorrectly) some things my flatmate had told me about how the flat was wired.
Removing all our faceplates revealed the following:
All but one of them has TWO cables coming in and out.
The one with just one wire coming in had the NTE5 socket put on it by the BT engineer when we first moved in.
All the cabling looks (to me) like CAT5
All the sockets except the NTE5 are unbranded generic - one has the IDC type connectors, all the rest are screw.
The one with one cable coming in is NOT the 'real' master: quite the opposite- it's the last socket on the chain.
I disconnected the faceplates in various combinations to work out the order of connection.
Because I am a terrible experimenter, I also called O2 and got them to change my SNR margin to 6db (from 9).
Thus I simultaneously changed two variables
When they did this my speed immediately jumped to about 6Mb.
Then I moved the Router to the first socket in the chain (and left all but one of the other faceplates offline (they were hanging off the wall from my experiment, etc.) and got the speed up by doing that to 7Mb.
At this point I have no NTE5 in the loop (it's on that end socket which is now disconnected).
This gave us a decent speed (7Mb) but the connection was ropey. Sync was being maintained but the speed would drop to 100 kbps for a few seconds quite often and then pop back up again. In short: not everything was rosy.
So just now I moved the NTE5 from the end of the chain up to the first socket and disconnected the last remaining faceplate. Currently the connection genuinely terminates at the NTE5 - though of course it's still not a real master: it's a CAT5 cable coming in to that point that I'm using two of the six wires of (they used the blue as the main rails).
When I did this, the router sync speed jumped to just over 8Mb.
But I will now see whether this has solved the drop out issues.
If not, I think the next step is to have our SNR put back up to 9db unfortunately.
We don't use a landline at all so we can live with all the remaining sockets staying disconnected (though I know we could solve with an ADSL splitter faceplate if we wanted).
As you suggested, I looked thoroughly in our utility cupboard and CAN see what looks like the phone wires (and power and everything else) coming in there, but any goings on are hidden behind plasterboard and floorboards. I haven't the will to tear it all up and see what's really going on... yet.
So in summary:
Currently have one socket connected and am getting 8Mb sync (~7Mb speedtest.net results)
Had dropouts all yesterday but going to see if I've improved things
Am still gettings 45db attenuation even though I KNOW we are under 2km from the exchange (I double checked we are on the exchange I thought we were...) - have no idea how this could be?
I'll post the uptime + error seconds and things for your opinion once I've had some reasonable uptime on this new setup.
Further thoughts, opinions and insights welcome!