You could, while booted from the CD, try to rename your .prefs files in Prefs/Env-Archive/Sys/ one by one and try booting from HD after each. I know, tedious work, but it should lead to more enlightenment :-).
Interesting - I took the "nuclear option": while booted from the CD, I renamed the entire Prefs/Env-Archive/Sys/ drawer on my HD and copied over the one from the CD. After doing this, I could successfully boot from HD into Workbench, although of course most tools weren't working and the screenmode was incorrect ... but it does prove the problem lies somewhere in Prefs/Env-Archive/Sys/
Will now replace the .prefs files with ones from the renamed folder.
Steve
[EDIT] Partial success - as I am slowly reinstating files from the original Prefs/Env-Archive/Sys/ drawer, I'm still able to boot from HD and more functionality is returning, including correct screenmode. I'll keep going until bootup fails, as which point I'll know what the problem was.
[RESOLVED] Turns out the culprit was locale.prefs. Having removed that file, and re-setting the locals preferences, all is working again - thanks to Niels for the advice about checking the .prefs files