Well, I sent the camera to Fuji UK. I got a text to confirm that they had received it. Later that day I got another text to say it had been despatched. I had paid an extra £10 for a quick turn round, but even so, I am impressed.
The Camera looks like its been ultrasonically cleaned. The on/off switch and shutter release are now perfect, but all the other controls feel better too. So even though I don't think it should have gone wrong in the first place, and I got no refund, I'm happy.
Went out in the fog this morning and got some great shots - love the Fuji Magic