The volume IS a template on the Eql side - I took it offline converted it to a template and then placed it online again as per the instructions in the "Automation and Integration with Microsoft System Center Virtual Machine Manager SP1 and Dell EqualLogic storage" white paper available here en.community.dell.com/.../20437936 Anyway, whilst I was writing this I manually created a thin clone from the template and it automatically brought it online as you said. I then took that clone offline and deleted it and then tried running the job to create a new VM from the template that had previously failed so I could compare the clone it created. Of course it then went and worked - and has continued working!!! I hate it when things just start working for no reason! Anyway since it's now working I guess there's no more issue *sigh* Thanks for the input.
I've finally managed to get a VHDX appearing as SAN Copy Capable on my VMM2012 R2 library connected to a PS4210XS - but when I try and actually create a new VM from it I get the following error Error (26104)Creating storage group 1EDEVOPSVMM01_ISCSI failed on array 192.168.30.93 with initiator iqn.1991-05.com.microsoft:1edevopsvmm01.1e.local and logical units LU1-f104cee5-SANCopyTest with error code Failed. Cannot create masking set - snapshots not supported. If you are attempting to perform VM rapid provisioning via snapshots in System Center VMM please use an EqualLogic template volume as your base volume (preferred) or use rapid provisioning via standard clones. Recommended ActionSpecify valid parameters for creating storage group. The VHDX IS on a template and I can see on the Eql that a snapshot has been created - it has the correct initiator access assigned to it but it is offline. If I manually make it online and then refresh the iSCSI initiator on the host it appears and I can connect to it and mount the disk on the host through Disk Manager. Any ideas why VMM is telling me something so blatantly untrue and how I can get it to work? Thanks, Mark.  
VMM Rapid Provisioning error with EqualLogic PS4210XS