well this is frustrating!
So, i decided to re-create the the dts.config file that enviro var pointed to, in a new location and re-set the var. Re-started the machine. used SET in command and it was pointing to the new location. Opened up SSMS in SSIS mode and looked at the msdb packages and joy of joys it was now showing the correct paths.
Since we have 2 enviro vars i then did the same to the other one. And after the reset. The original packages and the second set are both failing again..
This is Windows 2012, SQL 2012 SP1 CU5,
The folder the files are in, has permissions for all the SQL services to modifty (seems vastly more than it needs to read the file, but clutching at straws now)
Ive tried both C:\config files\TeamA.dtsconfig
and \\servername\config files\TeamA.dtsconfig (config files is a share)
Im doing re-starts between each envi var update to make sure that everything is getting the latest info.