Thanks guys - I didn't know about the madness episode but I had zero madness on that Alt anyway.
I think you have solved it Taipion - I did recently have a few alts in town that couldn't log in because their position was occupied. I thought I clicked no every time but If I accidently clicked yes I may not have noticed. That explanation would fit with the circumstances.
Thanks again for the help. luckily it was only a few hundred crappy gems - could have been a lot worse on other alts!