Thanks again for the input everyone.

More developments - after taking a closer look at the rear cogs, it's possible they ARE worn out as winding the pedals backwards and watching for a wobble revealed that some of the teeth seem to be worn a lot more on one side than the other, could this cause slippage? I will post a picture of the cassette once I manage to get the back wheel off (the nuts look to be rusted on) so you guys can take a look and give your expert opinions.

Also, it turns out I was using an unreliable method to see if the cog, idler and guide were lined up. The idler is in fact too far inwards on the big cogs and not perfectly lined up. I attempted to bend the hanger a bit to get things lined up but wasn't really successful.

Given that the large cogs seem to work fine with the idler not quite lining up, I think my inability to gauge whether or not the cogs were worn led me down the garden path a bit.