I've actually managed to track down the problem to a problem with .Net framework setup, somehow by playing around with the build settings within the Xamarin IDE I've corrupted it. To diagnose this problem in Visual Studio 2012 I turned on MSBuild build settings to Diagnostic;
Then identified a problem with C:\Windows\Microsoft.NET\Framework\v4.0.30319\Microsoft.Common.targets, and using a DIFF tool isolating the settings against a machine which had a working build process - copying the missing entry.
This seems to be a bug within Xamarin Studio, when time allows, I'll have to reproduce this for a bug report.