Master cylinder fitted after bench bleeding it.... has fixed my locking-on brake issue. As I'd suspected the fluid was getting behind the plunger seal and then stopping the plunger returning fast enough, causing the brakes to bind.

Trans overhaul went ok, it accelerates well in 1st and 2nd, but seems a bit soft changing into 3rd.
The strange thing is that if I shift manually from 2nd to 3rd it shifts well.... I haven't quite worked out why yet.