OK finally got it sorted.
To recap, I have an internal hard drive for media (sdb) which only used to have one partition (sdb1), using LMCE directory structure, public, always worked no problem. Then I made a small second partition (sdb2) for my clonezilla image backups, which I "ignored forever". This was when I got the problem.
I moved the images to an external HDD, reverted the internal sdb drive back to one partition, removed all traces of it from LMCE in web admin (thanks for the tip Joakim) and everything from unknown devices. Rebooted, LMCE detected it, and MDs could see it.
Don't think the problem was necessarily caused by what I have just described, but it happened none the less. I suspect it was a one-off installation issue, fairly sure the permissions were messed up somehow.