Maybe problem solved! Thanks for all the contributions.
This maybe only a temporary solution. I opened the final fuel supply connector into the injection pump to have a look. It was clean and so I put it back on. Then I started the engine to make sure it ran without any air block developing. The hunting problem had completely gone away...
For what its worth, my theory is: there may have been some air trapped in the supply hose at this connector.
...although I also note the oil level is too high (sartorst
Anyway, indications are that problem wasn't in the injection pump.
I'll come back if the problem re-occurs.