Managed to find the solution myself, no thanks to McAfee support who were awful on this occasion. It appears that Deduplication is the cause of our woes. The Microsoft article below covers it.
Good luck to anyone that still has large amounts of XP /Server 2003 because McAfee will give you no help even if the AV is installed on a supported OS and the problem is connecting to it from XP/2003! With support like this, McAfee will be losing custom!