Thanks guys. I'm inclined to think that the kids may have got their magnets a little close to the floppys. I think the drive itself is probably OK. Some gentle questioning resulted in slightly guilty looking faces. My fault for leaving the disks lying about... Actually I feel a little guilty too after MikeyG went to the trouble of sending me the disks. Sorry mate - still very much appreciated!
For the time being I'll wait patiently and try to read a bit more of the Octamed manual while the switch and required USB lead make their way to me. Possibly saved me from a world of pain down the road - if the disks were full of "work" it would have been a real gutter, and the Gotek option has to be a better bet long term.
Re flashing it, pretty sure I will have to - it's a generic drive so presumably the generic firmware is not going to work... I saw the Amiga ready drives on eBay but I am a cheapskate and I like to make life hard for myself.