FIXED!!!
Perseverance and we get there!.
The fix was as follows in my case:
Could connect using the [servername]\instancename but not using its alias.
SQL 2008 R2 Standard Edition x64 version
1) Open SQL Configuration Manager
2) Add a new alias entry in both the SQL Native 10.0 Configuration(32 Bit) and SQL Native Client 10.0 Configuration with the following:
a) Alias Name = your servers DNS Alias entry
b) Protocol: select 'Named pipes' from the drop down
c) Server: Should be the named of the server e.g. [servername]\instancename
as they say, 'it's easy when you know how'
And then retry connecting to the server using the Alias and BINGO. This should work for you also.