Man handling the rear derailleur I discovered the jockey wheels were indeed in the wrong position as a result of the rear mechs pivot point having seized up. I can push it into the correct position and the chain engages the jockey wheel and runs normally but the mech isn't moving freely by itself. This means it isn't extending fully to run in the big ring - larger cog gear combinations. Given the difficulty in servicing the internals of the rear mech I'm planning to replace the whole unit.
As an interim measure in the short term I've used a generous dose of penetrating oil around the pivot and it's freed things up enough to get things working for now. I wouldn't give it too long before a new mech is needed though.