Thanks guys, well a lot changed in the end. We actually ended up scrapping the app, despite how it started randomly working. And used a script we put together from other sources which checked the user wasn't local admin, then created the documents folders and alias. Packaged this together and had the package replace the com.apple.loginwindow.plist so it ran the scripts as a loginhook.
I've found Mavericks to be quite temperamental. I've since heard that Apple are moving away from networking, and the current stance is 'Users should work on the same iMac in a suite everytime'. Which is how they are meant to be used, but not exactly helpful for a school network!
Also if anyone wonders, always "force a local home" on an iMac binding to AD as Mavericks corrupts the permissions on a Windows home folder when it created the Documents and library folders. I've been looking at creating some symbolic links to redirect the local documents to network location but to be honest I've got this working now and don't really want to poke the bear.
Cheers.