After trying all suggestions.
Only the above magnet trickery WORKED.
Magnet held at the power switch for 1second did the trick!!!!!
The only thing that gave any hope before this trick was a constant tapping at the back of the phone behind the power switch - this was not fool proof and allowed the phone to continue booting but as soon as you stop tapping it would reboot again.
I even disassembled the device to assess the switch on the motherboard, playing around gave no success with this attempt.
(the switch its soldering and the board itself all looked healthy.)
Given the success with the magnet there is strong reason to believe the 2 metal contacts WITHIN the power switch itself were indeed stuck together -
HENCE whenever you attempt to power on (without USB connected) it wouldn't power up BECAUSE the 2 contacts were already touching (hence the device wouldn't distinguish the power button being pressed.)
However when inserting the USB to the phone, the device as you'd expect TURNS ON automatically without needing to press the power button... BUT because the 2 contacts within the power switch were constantly touching this would induce a undesired Power Button Press (albeit without actually pressing the power button.)
This now makes sense that when applying a strong magnet in and around the Power Switch - releases the 2 contacts within the switch & therefore deems the power switch usable once again (for how long the switch continues to behave is unknown - perhaps we need to keep a magnet on our key-ring at all times haha.)
Great diagnosis @nxt
Saved my girlfriend and I a lot of hassle.
Hope this helps anyone in the same predicament.
This is NOT s/w related - most definitely h/w related.