Finally solved this issue. It appears when my external exe was being executed a pop up relating to another exe failure was being thrown "Application popup: csc.exe - Application Error...

Thanks Jeff, Setting up of a proxy account has been mentioned although I still don't think its gone down too well with the DBA's. But I don't think we have...

Our DBA's are beginning to restrict xp_commandshell permissions and we have several SSIS packages which are essentially triggered on demand through logic in our stored procs. One of the workarounds...