Finally it's working. I am not 100% certain but suspect strongly the error was on the PSN side. I logged the problem with Sony last Friday and 5pm Monday (5 hrs ago) I was just doing a random try to get in and it livesynced a couple of times and then bingo I was in the lobby. I had confirmed my account worked on a friend's machine, but when I took my PS3 to a friend's place, same error on his internet connection. Also had some Thai friends who play UC2 respond to my question to them if they could get in. They said they couldn't either and were having similar problems/error messages coming up that I was.
So... thanks for all the ideas anyway guys. More brains on a problem are always better than just one, especially when it's just my brain. So it took Sony 10 days to fix up a PSN/UC2 server problem. Way too long I say. Although I didn't personally report it until 4 days ago, when I was certain I had tried everything on my end to fix the problem.
May I suggest to others reading if you have deleted and reinstalled both sets of game data several times over and everything else on your machine/connection/account checks out fine, get onto Sony straight away. They don't seem to be monitoring things too closely and chances are the problem is on their end - not yours.
OK back to UC2!! Happy happy joy joy...