This is how it seems (i.e. the problem only manifested after the return of the laptop). I did a time machine restore last night to the day it was returned, and the problem is still there. My next step is going to go back to the time machine backup pre-repair - unfortunately that's from July 31st, but it's really my only choice before having to do a full OS restore.
That being said, I don't think it's hardware related. I also discoverd last night that when I try to connect to an older UK TV VPN, it does seem to connect ok (I mean the user name is no longer valid, but the fact that VPN returns that info clearly shows its connecting - see below).
But yet other work VPNs (the ones I actually need) just have the previous issue - and yet i can connect fine to them on my other macbook (10.6, 2009 model), with the exact same settngs, on the same wifi network.
Oct 11 07:52:19 offline.local configd[17]: IPSec Phase1 starting.
Oct 11 07:52:19 offline.local racoon[597]: IPSec connecting to server 198.27.74.59
Oct 11 07:52:19 offline.local racoon[597]: Connecting.
Oct 11 07:52:19 offline.local racoon[597]: IPSec Phase1 started (Initiated by me).
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: transmit success. (Initiator, Aggressive-Mode message 1).
Oct 11 07:52:19 offline.local racoon[597]: IKEv1 Phase1 AUTH: success. (Initiator, Aggressive-Mode Message 2).
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: receive success. (Initiator, Aggressive-Mode message 2).
Oct 11 07:52:19 offline.local racoon[597]: IKEv1 Phase1 Initiator: success. (Initiator, Aggressive-Mode).
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: transmit success. (Initiator, Aggressive-Mode message 3).
Oct 11 07:52:19 offline.local racoon[597]: IPSec Phase1 established (Initiated by me).
Oct 11 07:52:19 offline.local racoon[597]: IPSec Extended Authentication requested.
Oct 11 07:52:19 offline.local configd[17]: IPSec requesting Extended Authentication.
Oct 11 07:52:19 offline.local configd[17]: IPSec sending Extended Authentication.
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: transmit success. (Mode-Config message).
Oct 11 07:52:19 offline.local racoon[597]: IPSec Extended Authentication sent.
Oct 11 07:52:19 offline.local racoon[597]: IKEv1 XAUTH: failed. (XAUTH Status is not OK).
Oct 11 07:52:19 offline.local racoon[597]: IPSec Extended Authentication Failed.
Oct 11 07:52:19 offline.local configd[17]: IPSec Controller: IKE FAILED. phase 3, assert 0
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: transmit success. (Mode-Config message).
Oct 11 07:52:19 offline.local racoon[597]: IKE Packet: transmit success. (Information message).
Oct 11 07:52:19 offline.local racoon[597]: IKEv1 Information-Notice: transmit success. (Delete ISAKMP-SA).
Oct 11 07:52:19 offline.local configd[17]: IPSec disconnecting from server 198.27.74.59
Oct 11 07:52:19 offline.local racoon[597]: IPSec disconnecting from server 198.27.74.59