Just a follow up on my projector. Bear in mind I am in Australia..
Took it to the Epson service centre, they agreed there was a problem (duh) and ordered a replacement Optical Engine from Epson. This all went pretty smoothly and I had the projector back in about a week.
30 hours of viewing later the image was becoming increasingly dim and I was noticing a lot of light leakage from the front vents. A few hours later the lamp finally blew. It had about 600hrs use before the repair (projector itself is 14 months old).
I rang service centre & epson to complain about the odd 'coincedence', knowing full well that the lamp was out of warrantly (only 6 months) and they could tell me to cough up the $450 for a new one! However, to their credit, I spoke with Tony at Epson Australia and he agreed to replace the lamp under warranty with very little fuss.
I then took the projector back to the service centre and had a reasonable discussion with the tech. He showed me that replacing the Optical Engine includes the LCD panels, entire optical setup including lens, and mainboard. Basically all that was left was the power supply, fans, and lamp. He also said that the banding issue was a known problem and they had "quite a few" epson projectors being repaired with this particular issue. Epson have not given them any information about the cause/resolution of the problem at this stage.
The lamp was replaced and I picked up the projector a few days later. Now I am much happier and hopefully won't have any more problems for a long time... Although I am a bit concerned about the quality of their products, I have to give them credit for the warranty support.