OK, I've had a little chance to fiddle... The results are good, BUT (there's always one isn't there)
Running E:\ntds\default.xbe does indeed make the light turn red, an lo there is the un-shadowed C:\
So I deleted, and copied over the stock M$ dash. The problem comes when I go to copy over the Ndure files. shadowc.img won't fit. Evidently when I rebuilt the HD within XboxHDM it only made C:\ minimally sized (which is what I wanted) so not big enough (only about 500MB) for the dash plus ndure files.
How to fix?
My guess is hot swap and use XboxHDM to redo things.
Maybe Frosty's rescue disk (which I got but am yet to try) has some options.
Well I'm not too unhappy because I did patch the Ndure install on E:\ and C:\, just skipped putting the M$ stock dash files. It boots fine and because I re-did the Ndure installer it doesn't try to boot the retail dash when the eject button is pushed.
Again thanks for your help.
BTW for others reading - Would you believe that most of the information I was lacking was actually in the new Ndure Installer 3.1 .pdf? Just goes to show RTFM. I guess that goes double for me.