thanks russ - sorry yes I should have specified what we are seeing in the source, so to clarify
when we browse to a page with the new image server set as the media url in admin we are getting seeing the page render with the correct image url (i.e. the new image server url) but it is permanently trying to serve the images from the cache directory:
it appears images are uploading correctly into the normal places like: /media/catalog/product/3/small_image//135x135/e/n/imagename_1.jpg etc
but when the page renders it always looks for the cache directory - which I guess is fine if the image is indeed cached - but the newer image uploads never will be.