I resolved this by reinstalling all wordpress files again. Something must have corrupted during the FTP process. Can now view basic themes and select as normal.
“View Site” also correctly links to my blog homepage.
Have just made the 2.3.1 download and installed on server. All good and am able to view admin however am not able to select even the basic theme in the Presentation tab.
Says that template is missing. Sigh. Can see that it is there and when I view postings they are formatted with basic theme.
When I “view” site I go to a blank page.