I found and worked round the 'problem' in the end, its was 16 bad sectors that where locking up the disk in OSX over USB.
The disk HAS to be read via the MyBook caddy as even if you dont set a password in the software the caddy STILL does full HW disk encryption for you making it unreadable by any other method.
In the end i connected the disk via the caddy to my linux NAS then using dd_rescue with various flags i managed to copy all the data out of the disk into a 700gb iso (Handily i had plenty of space free on my NAS).
1st time i ran it, i got lots of bad sector errors on the console and it gave up.
To get round the issue of the bad sectors i used dd_resuce and started from 0 working forwards with large reads till i got errors (3.5gb into the copy), then ^c to break out and skipped a bit and started from 4gb going forwards. I left that running overnight and then in the morning i started the 3rd part running from 4gb running backwards (backwards is slower then forwards), reading individual 512k sectors so as to recover the maximum amount of data.
All 3 runs where set to output to the same file, DDRESCUE when started creates a full size but blank file and never closes that file so you can just keep grabbing little bits and filling it up. This was all writen into the same ISO untill it was basically a full backup -8kb (16x512b sectors).
Having done this i just plugged the drive into OSX and it was detected as a local Time Machine volume and away it went restoring all my data.