Thanks. I figured that Joomla "Site Offline" mode wasn't really offline, just redirected users to a login and only let in registered super admins (Or regular users too as we have configured it in the settings).
But, it looks like that is the cause for us. Testing with live paypal in offline mode is how I have always done it in the past (although it has bee a few years / versions since I last did this).
Happy to test in live scenarios only from now to be safe. The Paypal IPN must be having a hard time with it.
Cheers, thanks for your time on this.
M.A.