Right, we know there is definitely a flat spot in the carb as it skips a bit when going into second gear. The cutting out started shortly after having the exhaust put on. There is no warning, it just stalls and we cruise along until we reach a safe spot to park. Immediately after we switch on the engine - it turns over and sometimes (not always) starts up again you have to really rev it up to keep it going. Leave it for a couple of hours to cool down and it starts up again fine. It was whilst looking at it yesterday we had it running for about 5 mins max and when took the cap off the main water tank thing that we noticed the water was very hot, spat out the cap and steamed.
Before we had the exhaust put on it ran pretty well, apart from the occasional backfire due to the holey exhaust and that flat spot on carb, you did have to work it a bit but it ran smoothly on motorways and engine didn't die at all. Although did use a lot of fuel.
I've been trawling thro the haynes manual, the fault finder at the back says two things that we haven't checked for; vacuum leak in the inlet manifold or associated hoses or the idle cut-off valve on carb but would either of these cause the water to heat that excessively. Vacuum leak in the manifold seems the most obvious if putting on the exhaust has disturbed or broken something. And i got the same response from my brother about the carb saying it would just cut the engine like that.
Unfortunately most of the people I know have experience with Aircooled, and i chose the watercooled because apparently they're better fuel economy wise and easier to drive. The later models would have been too hard for me to steer

Hope this is a bit more info, I'll get some photos on tomorrow evening, hopefully this may help
Cheers
Sue