Reading how others did have MNF and OBi110 working I began to look at the Telstra supplied ADSL modem. A Technicolor TG587n V3. Looking around the Aussie whirlpool forum, users suggested it was a piece of kr@p and had some 'locked-by' Telstra features.
I tried the various tips using telnet to get to those features but to no avail. Could not find a setting to disable ALG.
I bit the bullet and went and bought a Billion 7800n and once I connected to the Bigpond ADSL2 and rebooted the OBi110, everything began to work as expected.