Removed the bearings from the (shiny) race in the picture and fitted them in to the top cup until it had a set with no gaps between the bearings. Popped everything back together and nipped up the headset nuts and it knocks. Think the bearings are too small a diameter when used on their own.
So, either need larger diameter bearings or...might try and fit a normal 1" headset top cup assembly. I've got one good set of the weird size bearings, so I could leave the bottom cup set-up as it is (although when the bearings have had it I'm back to square one). Arghhh!