I think I've tracked down the problem. The neoprene o-rings in the service pack aren't labeled. I kind of tried to replace like with like and I'm pretty sure I've inverted the shaft seals on the spring and damping legs.
So the oil is leaking past the piston on the damper side and collecting underneath. The travel is limited by the piston sitting on the oil.
Let the air pressure out of the spring side and the damper piston can slowly sink back down through the oil underneath as the leak direction is reversed.
Looking at a third session with the fork in bits to get the seals the right way round....